Research shows that more than 50% of new companies will fail within their first twelve months of trading. That is a shocking figure that proves people take the wrong approach. We’re going to look at some of the main causes in this article. Hopefully, educating yourself about them will help to ensure you don’t make the same basic errors. Obviously, each business is different. So, there are a million reasons you could fail. However, we tend to see the same mistakes repeated in most circumstances. You just need to take some advice from this page if you want to succeed. It’s as simple as that.
There are lots of different ways entrepreneurs can set up a new company. The Colosimo Law Office always recommends that you seek professional assistance. Corporate formations are a complicated subject. You need the best experts in the industry working for your brand. That way, you can make sure you structure everything correctly. Failure to do that could mean you end up paying far too much tax. It could also mean you become liable for company debts. Get things right from day one by contacting a reputable business lawyer today.
Lack of funding
Many people think they can start a business without investment. That is often true if you plan to provide services rather than products. However, there are sure to be lots of hidden costs that you didn’t predict. So, all company bosses should seek investment during the early stages. You just need to create a business plan that investors can’t ignore. You can get professional help with that if you don’t have experience. Even so, all the information you require is freely available online. You can even get templates.
Bad marketing decisions
In the modern world, it is vital that business owners use effective marketing solutions. Lots of bosses still think that advertising in local newspapers will make them successful. That is rarely the case. Indeed, online promotion has taken over during the last few years. You will save a lot of time and money if you focus your marketing budget on the Internet. Open social media pages, build a website, and use Google Adwords. There is no minimum investment, and so you will never overspend.
Market research is essential when you launch a new firm. You need to know how much rival companies charge for their services. That is the only way to ensure you price everything competitively. You don’t need to undercut the rest of the market, but you don’t want to overcharge. At the end of the day, nobody is going to pay $500 for something they can get cheaper elsewhere.
Now you know why so many businesses fail within the first twelve months, you should be ready to avoid those pitfalls. When all’s said and done, your concept will play a big role in success. It doesn’t matter how much money you throw at a bad idea. It will never make a profit if you don’t have the right processes in place. For that reason, it makes sense to see a business advisor before you rush ahead. Going back to the drawing board could help you to succeed in the long run.