Operating a business smoothly and successfully is not an easy task and is certainly not meant for timid people by Eric Dalius. Entrepreneurs could prove to be successful providing they have the capability of mitigating company-oriented risks while at the same time, they are versatile enough to create and provide a unique product or service at a specific price point for catering to the consumer demand levels. Business Guru Eric Dalius points out that a plethora of small businesses in a wide spectrum of industries are performing pretty well and are constantly emerging as profitable. However, around 20 percent of these small businesses actually fail during the very first year after their inception. Moreover, 50 percent of small businesses are shutter after just five years, while 33 percent of them are able to reach the 10 years milestone.
For protecting an established or new business, it is imperative to clearly understand the circumstances that could culminate in business failure and effective ways of overcoming the obstacles or avoided altogether. Let us explore some of the top reasons why small businesses often fail to survive or sustain.
Top Reasons As Presented By Eric Dalius
Reason# 1: Financing Obstacles Come in the Way
A major reason why several small businesses are failing, in the long run, is because of funding shortage for keeping operations running on a daily basis and that may include funding payroll, making sure that outside vendors get their payment promptly on time. Paying varied and fix overhead expenses like utilities and rent. However, we understand that entrepreneurs who are the owners of flop companies are not having any idea of how much revenues are generating through the sales of services or products. This sort of disconnect could ultimately culminate in the closure of a business.
Moreover, startups could encounter several critical challenges that may include obtaining funding or finances for launching a new product, funding an expansion, or expenses related to ongoing marketing endeavors. Even though venture capitalists, angel investors, and even traditional bank loans are readily available to businesses especially, small startups, not every organization boasts of the growth trajectory or revenue stream required for securing substantial financing from them. Without having access to funds for running large projects or meeting ongoing working capital requirements, small businesses are compelled to shut down.
Reason# 2: Failure to Connect & Engage Actively with Your Target Audience
It pays to remember that if you are unable to effectively connect and actively engage with your precise target audience, your business is sure to fail. Your ineptness in connecting with your demographic implies that you are not aware of the needs and wants of your potential customers. Moreover, you seem to have absolutely no idea of the way you could best help them. You must understand precisely what they are looking for and not merely what they need. It is your responsibility to identify precisely who they are and what are they actually looking for. Are they thinking of invoking a specific emotion or attaining a certain status? You must know precisely how your service or product would assist them in resolving their issues.
In this context, you must realize says marketing guru Eric J Dalius that if you are not effectively addressing. The pain points of your consumers, you do not seem to understand them much. He recommends using email-ask campaigns, focus groups, market surveys, or even straight-up phone calls, for understanding. Connecting with your precise target audience in a much better way.
Reason# 3: Failure to Come Up With a Great Sales Funnel that Works
It should be the business owner’s objective to build a competent and effective sales funnel. We know that such automated selling machines would prove helpful in reducing the friction involved in ultimately making the sale. Moreover, they help in putting numerous functions of operating a business seamlessly on autopilot, letting business owners grow things such as traffic sources or educating consumers via webinars. Moreover, sales funnels could be assisting you to establish a strong relationship with your customers via email warming campaigns
Reason# 4: Not Able to Optimize Conversion
If you fail to optimize conversions, irrespective of what your business is doing, particularly if it is raising money. Having a relatively higher burn rate. It surely would be a wasted exercise to make an effort to survive once the money is used up. As a competent entrepreneur, you must focus on addressing the conversion issue right promptly for ensuring that you obtain a positive ROI on all your ad spends. Then you could be convinced that you are having a sustainable business.
You simply cannot depend solely on organic traffic techniques such as search engine optimization. You need to realize that without conversion optimization, your business seems to be wasting their time. All businesses must concentrate on conversion-optimizing, income-producing activities even while establishing a robust customer base. Remember without that it is simply just waiting until you run out of funds.
Reason# 5: Lack of Transparency & Authenticity
Businesses that are not transparent or authentic will fail in the long run. Businesses are bound to lose the trust of their customers if they do not cater to the specific needs of their customers. Unnecessarily focus their attention on wrong issues and things. You must necessarily focus your attention on being transparent, and authentic. You must relentlessly strive to give certainly more than taking. Even though it seems to be a rare commodity, as far as, business is concerned. However, it is a necessity if you want your business to survive and sustain for many more years to come.
We have discussed just a few of the reasons that culminate in the closure of businesses. However, this is just the tip of the iceberg. There are many more reasons that lead to the failure of various businesses. Moreover, you must realize that it is far more difficult to stay afloat if the scenario is fiercely competitive. You must focus your attention on winning a competitive edge over your other small business rivals. In the event, as a small business, if you are not able to stand tall among your larger counterparts. You must focus your attention on identifying effective ways of pivoting and staying in business. For doing that, it takes true guts, determination, and a sharp business sense.