Top 6 common reasons for business failure
Business failure is as common as starting a business. With reference to top researches and websites business failure rate is more than 85 percent. This means only 15 people out of every 100 people who started business survive for more than a year. From the remaining 15 percent also there is business closure, shrinking the list furthers. We have analyzed some of common reasons for business failure.
Poor business plan
Most of them start without a business plan or poor business plan. Entrepreneurs have business ideas in their mind and very few of them have written document about implementation strategies.
Hiring unskilled workers causes business commitment failure
Most of the business owners end up hiring unskilled workers due to which overall company performance goes for a toss. Business commitment failure becomes a common activity causing a hit on customer trust.
Consequences of incorrect sales forecasting
One of the biggest hit to business is due consequences of incorrect sales forecasting. Incorrect sales forecast results in either hiring more than required workforce or there may be workforce deficit. Both situations are unfair to business.
This is probably most dangerous because employee dissatisfaction results unwanted resignations at wrong time. If employees do not believe in company goals, they will not put their best efforts towards growth.
Poor financial planning in business
Business runs for and with money and poor financial planning in business can get you business shut anytime. Most of the business failed, get this answer when post failure analysis is done. Poor financial planning or spending money without planning shrinks your financial backup and in long run results in financial crisis.
Quitting business early
When tough time comes, most people decide easy route of quitting business early. Exist is one of the most easy decision to ensure hassle free life. It may or may not come out as expected but most of the failures have chosen this route.
There can be more depending on real time scenario.