There's much talk about the grim statistics of businesses which fail within their first year. You've probably heard them: one out of two, eight out of 10. In actual fact research published in the Sydney Morning Herald indicates it's just 1.5% that don't make it through to their first anniversary.
Instead, it's the first four years that count. It's the times when businesses have ' to be brave and grow", according to analytics and data firm Veda.
Here are five reasons businesses fail and what you can do to avoid it…shared by Clive Enever the Business Mentor and founder of The Coaching Circle.
Business planning isn't something that ends with the first draft of strategies, market research and financial projections. Like the actual business, a plan should evolve in a proactive manner, noting your successes, charting the failures and responding accordingly. It's a living document that needs re-evaluation, honing and restructuring over time.
Failure to communicate
Many a business has a great product, excellent staff and fabulous premises but that means nothing without communication and interaction with your customers. Business is about feedback and promotion: knowing what the consumer wants and telling them you have it.
This applies in so many ways that it's list-worthy, so here we go:
If you're in business you should:
Seek feedback and referrals
Have an online presence
Have a marketing plan
Have an advertising strategy
Be actively looking for incoming technology, trends and new ideas
Keep an eye on prospective and actual competition
The best way to manage this is though two-way communication with your clientele.
Poor cash management
So you've defied the perceived odds and made it through the first year. Excellent…what about the next three? How do you fund expansion, deal with recession, offer more, or handle additional staff and production?