The eight most common reasons for failure to start a business

Source: Internet
Author: User

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Generally speaking, from the initial stage of capital allocation and scheduling, talent recruitment, marketing strategy, management skills, as well as the changes in market trends, competition, coping strategies ... And so on, it's possible that the business you started is going to be doomed. The following are the most common causes of failure in the entrepreneurial process:


1. Financial shortage.

Entrepreneurs underestimate financial needs, lack of financial budgets, and the inability to use capital efficiently in operation or production, making it difficult to create surpluses.

Many people do not take into account the importance of liquidity at the beginning of their business, so they venture rashly without sufficient liquidity. As everyone knows, many people in the business after the operation is not very smooth, the need to adhere to a period of time, because there is not enough liquidity and had to close early. If entrepreneurs do not have sufficient liquidity to maintain the operation for more than half a year, it is best not to start a business easily.

2. Insufficient market information.

Including not really understand the potential market demand, wrong estimate share, on the sales channels and competitors of the situation is not clear.

Many entrepreneurs do not understand the operation of their competitors, and do not carefully analyze the business strategy of competitors, do not know what the next step will be what measures and means to deal with themselves. In particular, not to analyze the pros and cons of both sides, blindly acting on their own feelings, in the end often suffered.

3, bad product too much or bad rate is too high.

As a result of too many bad products, or bad rate is too high, costs and losses are too large, coupled with the beginning of the product also lack of visibility, resulting in the product unsalable, resulting in a large number of inventory hoarding.

4. Wrong strategy.

Improper corporate values, ineffective business management and sales strategies, estimates of competitors, and so on, this includes the entrepreneurial philosophy and competition strategy errors, because these strategies are related to the survival of an enterprise, therefore, this is the most important cause of failure. Once the entrepreneur has a big mistake or incident, it often lacks the coping experience and the solution. Therefore, for the first time entrepreneur, a wrong strategy can be fatal.

5, the product elimination rate is too fast.

If the product life cycle is too short, or the production of the product is not the trend, the product soon to be eliminated fate, this is not easy to be eliminated from the trend of products, in the short term, it is likely to be the fate of failure.

Popular products for young people generally have a very short life, entrepreneurs must be aware of this rule, when a popular product on the road, you need to invest in a piece of special care, perhaps when your new products are listed, that is, when the product is no longer popular.

6. Improper management.

Entrepreneur management experience is not enough, the capricious, often in the wrong learning, but it consumes many of the company's resources, can not establish a reasonable, flexible and efficient system. For example, improper employment, resulting in unnecessary internal friction, such as the financial system loopholes, so that employees have the opportunity to Shing, such as the failure to pay attention to safe production, causing significant casualties and other accidents.

7, in the improper time to start a business.

For example, open air conditioner store in winter, affected by the low season factors of the product, may cause setbacks to your entrepreneurial career. Or is the start-up soon by the state, the local regulations of the newly promulgated industry regulation, thus unable to anticipate the idea, resulting in waste of resources or can not operate.

8, do not understand the relevant provisions of the State.

The state has stipulated that many industries cannot be operated by private owners. Some industries have previously been allowed to operate, affected by changes in policy, and even the indefinite liquidation of a particular industry, and so on, these should be understood clearly.

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