I have had the pleasure of starting a towing company from scratch and watched it grow through different stages to maturity. Running a business is not for the faint-hearted. Ask any successful business owner and you will learn they have had the ability to mitigate company risks while at the same time bringing products and services that appeal to customers and meet demands.
While many businesses from different industries perform well, a large percentage, 80 percent- of these businesses fail within the first five years. Running any successful business calls for a combination of different factors including passion, planning, and funding. There are many reasons why many businesses do not grow to sustainability and ultimately fail, and here are top of the reasons.
There is a large percentage of entrepreneurs who believe they hold the future of their companies in their hands. It is not enough for a founder to think they have all it takes to lead their companies to success. Effective leaders are not just born. They grow to exceptional levels through learning and experience. For a business to succeed, it needs to have a well-crafted management team that can steer it to greater levels. There needs to be well-organized teams who can deliver the company’s mission and vision.
Lack of long-lasting value
Successful companies achieve greater levels of success through the exceptional delivery of their goods. A company fails to succeed once it begins to under-deliver. Your goods and services must add value to customers and at all times outsmart competitors. You must ensure customers are happy doing business with you. You will be able to make a profit by creating value for your customers.
Failure to understand the target market
Good planning and extensive market research are vital for the growth and profitability of any business. If you are setting up a quick food business or a cloth line that is not well thought and has no real impact on what already exists in the market, you are doing it wrong. To be a smart business owner, you should be able to project the demands of your customers and deliver them in a way that exceeds their expectations. It is not always about giving customers something unique but also knowing the fundamentals of your target market.
Reliance on a single customer
On paper, all businesses start small. You will normally start by having a single customer whom you deliver your goods or services to. You should never be fooled to think what works for one customer should work for all customers. However, if you have ticked the right boxes, your business starts to grow exponentially. Many businesses make the mistake of finding comfort in offering their products and services to one loyal customer. If you have one customer, you don’t have a business. It means that customer is your employer and they can terminate working with you anytime. Diversity is key and its only through diversity that you will be assured of growth.