There have been increasing questions as to why business failure is on the rise. Large and medium-size companies file for bankruptcy regularly, and many small businesses cease to exist even before they start.
With the increasing world population, there is no other time when there are more entrepreneurs than in this generation. Businesses are created every day, and companies also close as entrepreneurs throw in their towels quitting their dreams of being the next Fortune 500 entrepreneurs.
A report from the Small Business Association stated that 30% of new businesses fail with 24 months of creation. Half of the businesses created don’t make it past their fifth anniversary, and about 66% don’t get anywhere close to experiencing their tenth. In a practical sense, three out of four companies would not be in business for any longer than fifteen years from the year of its creation.
The reason for this not far-fetched as most entrepreneurs that have failed has their inability to pull through pinned to one of a few reasons. Many entrepreneurs have done comprehensive market research and had ventured into the right market at the right time, they had a good team, had funding, and had the correct execution but still wind up before they meet the light at the tunnel’s end.
With all these external factors in place, business failure is attributed to these reasons.
Poor Time Management
In the Middle East, there are 24 hours in a day, which is not different in Africa, in Europe, America, or any part of the world. But there are entrepreneurs in these regions of the world that are doing well, and many others are closing up their shops and throwing in the towel. They all share the same number of hours each day; the referee assistant isn’t giving an extra playtime to anyone. How well some persons make use of that time each day matters a lot to the progress of their businesses and lives.
According to Business News Daily, some entrepreneurs find their hook working less than 30 hours a week while others believe grinding through 80 or 90 hours a week does the magic. This depends on their ability to manage time effectively. Some can choose to work 90 hours and do nothing to move their businesses forward while a perfect time manager will work a couple of hours less than an employee and produce results. Proper time management increases productivity and efficiency. Every entrepreneur should perfect their time management skills to make sure that they are prompt with action.
Improper Business Planning
Yeah, there have been businesses that started without a plan, but we can’t tell how far they went. Businesses starting today are billing every hour towards a well spelled out plan. This is not only for new companies, but even stale and well-established businesses also have plans, and they work towards that plan. The business plan is a clear map to where the entrepreneur is taking the business from where it is when the plans were made. The business plan creates a path, an order of the progression of events in every area of the business. Of course, situations can call for some adjustment on the plan, but it all remains the same: a set goal, from a start point through the path. The plan is a marker for how far the business has gone.
“How do I know if I’m making progress?”
“Does my approach need some adjustment?”
Well, you can’t tell without a well-structured business plan.
Other than the business plan, an entrepreneur should plan his life, actions, and events effectively. Entrepreneurs are as human as every other person; they have families, personal challenges, and are susceptible to life’s unexpected occurrences. Planning their time gives them the chance to prioritize, make well-thought-out trade-offs, and manage other emergencies and even personal finance.
Businesses may fail for many other reasons, but one sure thing is that an unplanned business does not stand a chance.
Ill Commitment to Purpose
Many young entrepreneurs jump into the business world with so much enthusiasm that they fail to realize that they don’t have a use for their quest for entrepreneurial success. Yeah, being an entrepreneur is adventurous, but it is a disastrous adventure when it purposeless.
Most people start a business because they want to make a lot of money. Unfortunately, nine out of ten of such businesses don’t get to see the daylight. The commitment of an entrepreneur should be rooted in a stronger purpose that is valued far more than money if there must be a chance for him/her to succeed.
“Why do I really want to be successful?”
This is a question that entrepreneurs should ask themselves every time. If an entrepreneur does not have a rigid reason for taking the hits of building a business, then there shouldn’t be a place for such a person in the Entrepreneurial Hall of Fame.
Many successful businesses were built around definite purposes like family, community, country, and many other reasons that many writers may not be knowledgeable enough to state.
An entrepreneur should find their purpose and stay committed to it. It would serve as a reminder as to why he or she is taking the hits that come from building and running a business.
Persistence is the key to long-lasting success. Most entrepreneurs fail to attain business success because they couldn’t push on to see success. The weight of entrepreneurship does not get lighter as the business grows; instead, it becomes heavier. Many entrepreneurs are hunched figuratively from carrying the weight of owning and running a business, but they would never be successful if they never persisted. No matter what happened, successful entrepreneurs didn’t throw down the towel.
Many other factors may be the reason for business failure. If those factors are in place and these stated here are not, chances are the businesses wouldn’t get through the sieve. With proper time management, priorities are made right; challenges are solved early enough through proper use if time. As much as entrepreneurs aim for perfect time management skill, a good business plan, and also a well-planned out personal life is a valuable asset. An entrepreneur’s purpose for being in business is his/her drive. Having a concrete purpose, staying committed to it and perseverance are the significant drives of business success.