To start a new venture is an ambition for every employed man. Perhaps all men want to begin their own small business instead of doing a daily routine job on a fixed salary. Some people do it as part time and some start as full time entrepreneur. Unfortunately most of them have to face failure in their attempts, maybe finishing with heavy debt and other liabilities. Often the small entrepreneurs can stop these happening through proper business planning, attention on business and a backup plan for emergency.
- Copying others: It is the biggest responsible reason for most failures. You have felt several times that “he started business without enough resources and today he is a millionaire, I should also do”. The thought is quite appreciable but we should know his tactics before starting instead of starting a new setup without proper planning and arrangements. New start-ups demands higher research of the field before beginning. Initially you should do proper research of the particular field with its pros & cons, marketing future, profit ratio etc. to avoid any breakdown.
- Lack of finance: Finance is second factor in each start-up. Often people try to start business with less or enough money borrowed from banks, relatives, friends, etc. This is the biggest mistake of new businesspersons. They should keep minimum 25% extra money in their account to handle financial emergency occurred in the business. Maybe you have to give a credit to customer or you have to announce free gifts or something else, that time this extra money will benefit you to get growth.
- Untrained staff: Small entrepreneurs have little amount to invest so they try to hire employees on low package that results in inexperienced, untrained or half-trained labor as staff. This is another reason to fail. Although trained staff comes with higher prices but they can help you to earn more profit in less time with their expertise, knowledge and experience. There is one more option i.e. you may hire a higher-expertise person as supervisor to make learn the new guys.
- Lack of knowledge & information: If an entrepreneur is not familiar with the business tricks, markets, guts, etc. he will have to depend on his staff members, which is a suicide attempt. He may be a victim of misguidance leading into a complete downfall. Thus it is best option to learn the business basics before starting a new venture.
- Lack of advertising: Advertising marketing is the most essential tool in a business that can give an awesome growth to your business. Remember, we are living in a marketing era where everything can be sold through good marketing regardless of its quality, price or usability. If your product is advertised very well and it has quality too, you will get an overnight success. Small entrepreneurs should work out on it to improve their investment-profit ratio.