Eight common causes of entrepreneurial failures

In general, from the early stages of entrepreneurship, fund allocation and scheduling, talent recruitment, marketing strategies, management skills, as well as subsequent market trends, competitions, and coping strategies ...... And so on, it may lead to the fate that your company cannot survive. The following are the most common causes of failure in the entrepreneurial process:

1. The funds are short.

Entrepreneurs underestimate their financial needs, lack of financial budgets, and failure to effectively use funds in operation or production, making it difficult to create a surplus.

Many people did not consider the importance of liquidity at the beginning of their business, so they had to rush to start a business without enough liquidity. It is unknown that many people may not be able to operate smoothly after starting their own business. They have to close their doors in advance because they do not have enough liquidity. If entrepreneurs do not have enough liquidity to maintain their business for more than half a year, it is best not to start a business easily.

2. Insufficient market information.

This includes a lack of real understanding of the potential market demand, incorrect estimates of market share, and unclear understanding of the sales channels and competitors.

Many entrepreneurs do not understand the operation of their competitors, nor carefully analyze their business strategies. They do not know what measures and means their competitors will take to deal with themselves. In particular, if we do not analyze the advantages and disadvantages of both parties, we will always suffer in the end by doing what we feel.

3. Too many bad products or too high non-performing products.

Due to the fact that there are too many bad products, or the lack of profits is too high, the cost and loss are too large. In addition, the products at the beginning of the business are not well-known, resulting in unsalable products, resulting in a large inventory hoarding.

4. Incorrect policy.

Improper enterprise values, ineffective business management and sales strategies, and misestimates of competitors, among others, include incorrect entrepreneurial ideas and competitive strategies. These strategies are related to the survival of an enterprise. Therefore, this is also the most important cause of failure. Once an entrepreneur encounters a major mistake or incident, he or she often lacks experience and solutions. Therefore, for first-time entrepreneurs, a wrong strategy may be fatal.

5. the elimination rate of products is too fast.

If the product's life cycle is too short, or the products produced are not fashionable, the product will soon be eliminated. This kind of product that is not fashionable and easy to be eliminated after the start of the business, in the short term, it is very likely that the fate of failure.

Popular products for young people generally have a short life cycle. Entrepreneurs must find out this rule. When a popular product is popular, you must be especially careful when investing in it, maybe when your new product is listed, that is, it is no longer popular.

6. Improper management.

Entrepreneurs have insufficient management experience and often learn from mistakes, but they have consumed a lot of company resources and cannot establish a reasonable, flexible and efficient system. For example, improper employment leads to unnecessary internal consumption. For example, the financial system has loopholes, giving employees the opportunity to lose public fat and private resources. For example, they do not pay attention to safety production and cause major casualties.

7. Start a business at an inappropriate time.

For example, opening an air-conditioner store in winter may be affected by off-season factors, which may lead to setbacks in your startup career. Or start-ups will soon be restricted by the newly promulgated industrial management regulations of the state and local governments, which will lead to unexpected ideas and waste of resources or failure to operate.

8. Do not understand the relevant national regulations.

The State stipulates that many industries cannot be operated by private owners. There are also some industries that are allowed to operate, which are affected by policy changes, and may even suspend business for rectification of an industry indefinitely.