Content
Why Businesses Collapse: Top 10 Reasons
27.07.2024 10:20
Updated: 28.09.2024 01:32
When you start your own business, sometimes you have to put everything on the line.
However, the huge risk does not become an obstacle to realizing a dream by taking out loans, borrowing money and putting everything into action.
This is where self-confidence and steadfastness come into play, otherwise everything will go down the drain. And many, of course, have lost everything because of mistakes.
The current state of the market is poorly understood
The market is unstable, and to be competitive and to guess the demand, a thorough market analysis is necessary. On the issue of demand - in order for the business not to fail, it is necessary to monitor the constant change in demand.
Bad staff
The wrong partners and bad staff can also be a disaster for a business.
Sometimes, when trying to protect themselves, a person prefers to involve relatives, friends, and acquaintances in the matter, despite the latter’s insufficiently high level of professionalism.
Inexperience
No matter how many books you read and how many trainings you take, business is full of nuances and pitfalls that can only be learned through practice.
Self-confidence not backed by knowledge
A business cannot succeed if there is no good knowledge in management, marketing, and financial management.
Finances begin to leak away in an unknown direction, but proper financial management is the cornerstone of building a business.
Subconscious Setting for Failure
No matter how active a businessman’s actions may seem from the outside, no matter how confident he may be, the subconscious mindset for failure will still lead to it.
It is known that money is an energy that obeys only those who are ready to cope with it.
Incorrect location of the company
For example, the microblogging service Nouncer failed, according to its founder, because of a completely wrong location. By locating the company in New York to provide itself with high-level employees, it did not acquire an audience.
This audience is hackers, programmer freaks, who live not here at all. As it was realized later - the best place would be San Francisco.
Financing
Some business projects fail simply because of insufficient funding, because investors cannot be found. It is very difficult to convince someone that a given business will pay off.
Competition has thrown aside
As soon as another business idea is launched on the market, it is immediately picked up by a large number of businessmen with whom it will be necessary to compete. And here there is a high probability of losing the lead, which means losing everything.
Problems with investors
Problems with investors and, oddly enough, lack of interest in the industry - when business is done just for the sake of business, without interest in the subject - can also be the cause of collapse.
Price formation
One of the key points in business is the formation of the price - it should not be low (otherwise there is a risk of loss) or high (which will lead to a lack of demand).
Earlier I talked about why an employee deliberately provokes a conflict with his superiors.
