4 of the main reasons your business is going to fail

TommyCarey Level X³

July 2, 2018, 9:16 am

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It's sad to say that your business will likely fail, but it's a sad truth because around 70% of startups will fail within the first 5 years of their existence. When you start up a business you likely think you're going to be successful because you're unique and have the best idea out there, but you're likely not the first person to be in this industry so you need to be ready for a fight.

It doesn't matter if you're sick, have kids, or have other things to do in your daily life. If you're not working on your business each and every day, you will fail, and it's no ones fault but your own. You need to have the right spending habits, you need to constantly be testing even after you've launched, you need to be sure your team is perfect for what you're trying to do, and you need to always be consistent. And that's what this discussion is all about, so please keep reading.

Wrecklace spending habits
The main thing you can do to kill your business is spending recklessly. If you're making $150,000 a year and spending $120,000 on a new luxury car, you're going to fail sooner than that 5-year mark I mentioned above. You can't live like a king when you're making enough to buy one thing, you need to always reinvest the money into your business in order to break past that 5-year mark.

Think about it, if you're spending 80% of your profits on things you don't need, you're never going to be successful. Now, if you're spending only what you need to on things like food and bills, and investing the rest into your business, you'll likely be successful far longer than that 5-year mark 4 of the main reasons your business is going to fail

4 of the main reasons your business is going to fail

Not enough testing is, or was, being done
So many companies out there forget that they need to test a product or service before going to market. This is one of the reasons we see so many products recalled, and that's because it was launched to the public far too soon and the testing just wasn't done. Not only do these companies have to take back all these products, they have to refund the buyers because now they don't have a car or a washing machine and have to figure out a way to get stuff done without those products.

If you're not testing your products, you better have hundreds of income sources, making millions a month because you're not going to last long as a business owner.

They have the wrong team in place
One of the biggest company killers is hiring friends and family to do things specialists should be each day. Many times a person will open a bar or a restaurant and hire their friends and family to do the job, but that's not going to end well, this is because they likely don't have the experience to take orders or tend bar.

In almost every situation you will be firing your friend, sister, cousin, aunt, grandma, etc. because they will constantly be messing up due to not having the experience you need to push your business. Now, if you were to hire the right people in the beginning, the products and services you're selling would bring in a great deal of profit because your team actually knows what they're doing and you didn't have to train anyone.

They are very inconsistent in what they do
You MUST be consistent in what you're doing, especially with a business, and that's because you need direction. If you're all over the place and trying to do everything at once, you will be stretched too thin and likely fail within 5 years. This is another spot where the right team members will help you succeed, and that's because they can take over certain jobs you were doing, which lets you focus more on running the business and be less stressed doing it.

In conclusion
Businesses don't last long if they are spending recklessly, aren't testing every at every stage, have the wrong team in place, and are inconsistent in everything they do. I can talk from experience when it comes to starting up a business and having it fail simply because you didn't have the right team. I had a friend bring his brother into the mix and we brought him on as a partner, soon after that he was buying sushi and bringing girls on dates while using the company card to pay for everything, and it failed within the first year solely because of this one person. The beginning stages of your business are the most crucial, so get them right on the first try and you'll likely be successful down the road 4 of the main reasons your business is going to fail

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Thanks!

Tommy Carey

Comments

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fishbate

I have my share of experience with "Not enough testing is, or was, being done" on my product. I have a small crafts store and i have been making my own products for quite sometime. One thing i learned in product quality is testing a product by having it use by a different person. Before, all of my new products are only tested through my methods which had problems because my testing is not sufficient enough... well i thought it was sufficient.
When i had a quality problem, i tried using other people to test my products and i got great results. I used the comments and concerns of the test persons and try to improve some features to make my product more worth it when it comes to quality.

8 years ago

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TommyCarey

A great way to do testing in your niche is to actually give away products for free in return for some actual feedback. You'll give your products to people who will tell you what they liked, what they hated, and what they think should be tweaked about your product. Web designers and service providers do this all the time, myself included, we will have a monthly subscription service and give away 10 or 20 accounts to test how everything works. After we get some feedback we will edit and ask for more info in return for them getting free accounts. We won't ask these people to pay us after the beta testing is done, because they've helped us out enough that they've earned their accounts, so you shouldn't be asking people to send back the crafts you've sent them in order to get honest feedback 4 of the main reasons your business is going to fail

I actually got contacted by an article creation service here on seocheckout, well they were more of a Title generator for my articles, and they wanted me to test their services. I was going to get 1 month of service, then I would have to pay $74 a month to just generate titles lol 4 of the main reasons your business is going to fail

I quickly turned them down because there are plenty of free services out there that will do this, but if they were to give me a free account I likely would have recommended them to any writer out there, which would have made the company more money through backlinks posted by me and my recommendation. But they passed on that idea and only wanted my money 4 of the main reasons your business is going to fail

So, give away your products or services for free if you can afford to and you will get a lot of feedback as well as loyal clients 4 of the main reasons your business is going to fail

Many businesses fail because they treat their customers like cash cows and not real people, which is not how strangers wanted to be treated.

8 years ago

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fishbate

Thanks for the tip TommyCarey , most of my test persons are random people like regular customers and friends of my friends so that they will not be too kind to me. I have some freebies for my test persons if the quality review of the craft is not good. But if the comments are good i just give product to them as a token of appreciation.

8 years ago

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Kakashi2020

Basically if you're selling crap, then you'll get crap in return. So product testing and benchmarking the service and quality is a must or else you'll end up losing a lot and not earning.

8 years ago

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Corzhens

This reminds of the anecdote of the owner of the largest fast food chain here. He was testing his products with his friends as the testers. When the result is perfectly good then he gets another set of testers like neighbors and strangers. The free burgers are attractive for testers so there is no problem in getting testers. That was his method of research and development for his products which made him successful. Now he is one of the top 10 richest men in our country.

8 years ago

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Barida

Spending out of the business is one sure way that can bring a fall for the business as you may end up spending the cost value of the business. So, it is pertinent that every business owner understand the need to be careful with expenses especially as it concerns household expenses. One good thing about doing this is that you can be able to monitor the progress of your business to check whether you are going up or down in the sector that you are into.

8 years ago

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TommyCarey

Yeah, you should never mix up business funds and personal funds, because not only will you break a veil of business but you will get to use to using the business card like it's your own and that's never a good thing.

Your business will definitely suffer if you're not managing your money coming in and going out. If you're spending too much on things you don't need, you won't be very profitable, and that's one of the reasons businesses go under quickly. They will think they need everything possibly imaginable for their website, then rack up a $5,000 charge on things they don't need for 6 months, and now those funds are gone and could have been better used on something like Facebook or Adwords ads to bring in more profits.

I like to run my company like I have to work for someone else and ask them if I can purchase something. I'll do all the research, figure out if I really need something, then I'll find the best product or service and also the one that's most affordable that does the same thing as the best reviewed one. I'll get what I need, avoid what is needed in 6 months or a year, and not spend more than I need to in order to get everything operational and running just fine. Most people don't do this and that's why they tend to fail.

8 years ago

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Kakashi2020

I really think that being focus and consistent on what you do and having the correct efficient team of subordinates to support your business along with proper spending will give you a successful business.

8 years ago

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aeon

You're right, having the wrong team will not help you, and it's really hard to get your relatives to work company, they should undergo on the process. Well, that's really hard to do, to say no to your relatives.

8 years ago

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overcast

I have to agree on the consistency part. And you can see that failure is because people lack the consistency that is being happening around. Another thing I have learned is that when it comes to the recurring clients if you dont' get that then also failure is step closer. So for anyone who is trying to make money in online business needs to have few things properly set up. And they have to work on that process.

8 years ago

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Kakashi2020

Your business would surely fail if you implement the wrong marketing tactics, I've seen a lot of businesses fail because they have poor marketing strategies, this could be the fault of the owner or who ever handles the marketing of the business.

8 years ago

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treecko142

It baffles me how people can be so much wasteful with their income, and I'm not even talking about people who have businesses. They think about immediate gratification rather than saving up for the future and for their needs rather than their wants. Naturally, businesses run by people who are like this would never be successful even if they have a lot of customers.

8 years ago

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clairmatin

Not enough testing is, or was, being done

This is the most important reason I failed the first time I tried! I started my business without having researched enough and without performing enough tests for the service I was providing. I also had the worst team on the planet.
These are very important points one should stress.

8 years ago

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jennyfermanuel

I love this.
Even a normal employee do the same, spending more than the earning you get monthly, will put you into a bad position.
Here in my country, people spends more than the money they are earning from their work or business. This leads them to failure. Just for show off most of the times, leads to a lot of debts. People needs to control spending, they need to learn the difference of our "needs" and "wants".
If a businessman don't even have a self-discipline about his expenses, imagine how bad he is in other aspects of handling the business.

8 years ago

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cmoneyspinner

TommyCarey ~ One of my kids had a work-at-home job where he evaluated websites. People want "everyday people" to review their website. After visiting the site, he sort of responded to a questionnaire about the site and then added anything extra. Have you ever used such a service?

8 years ago

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Corzhens

Whether you are in business of not, reckless spending habit can definitely ruin your finances unless you have an unlimited source of money. I have learned to spend wisely when I was in high school because that was the period when our family was experiencing financial difficulty. And when I got a job, my usual tendency was to save a little money for emergency purposes. Sometimes you can save a lot and sometimes there is nothing left to save. But the most important thing is the attitude that you don’t just spend money foolishly.

8 years ago

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RhealaineS

I totally agree with you. The money of the business must be separated from your personal money. You have to remember that your capital do not belong with you. It belongs to the company. And in starting a business, usually the return of investment takes time.

8 years ago

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jpyy

Yeah, the reinvestment thing is a biggie. For instance, I know a friend who made $14,000 online yet now is back to the ball and chain. I mean, he wouldn't reinvest his money in his business. Anyway, his excuse was he had car repairs and I suppose that was valid, but what a shame!

8 years ago

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jayjaydimson

It will fail if the income is getting lower, well, its the most important things to earn if you have a business because that's the main priority of every businessman all around the world.

8 years ago

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mitan143

'Wrecklace spending habits', I also believe that it is the core reason why other business go down with inconsistent direction of what businessmen do. Personally, I have already experienced such situation like when I did a small business before. But I don't have any idea on running a business that time. At first, it was really successful but when there are characteristics of being a businessman I lack of so it didn't constantly going well and I stopped it at the end. Honestly, I was immature that time too and I really regret it not getting all the information or things that I need to consider first. But at least I have learned a lot from that experience and I will never do the same thing again in the future. Your tips are really great and informative so it needs really to be kept in mind.

8 years ago

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jpk0007

I think when we start anything new, there is a lot of energy and enthusiasm for starting afresh. if we are able to sustain the same energy and enthusiasm while doing the proper planning and developing a very competent team around us we surely are on the right track. I guess to become successful in any business we need a lot of patience and consistent efforts to sustain even in difficulties and problems which are bound to occur especially when we are starting a new venture. Any mistake or errors at this crucial juncture can lead to the winding up of our business and cause a lot of disappointment. if however, we are able to carry on steadfastly in this initial phase, then we will surely progress on the right track to success

8 years ago

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