The human life is made up of priorities here and there, as humans; we prioritize on daily basics. The opportunity to make my schedule with my business and my family in mind is one thing I love about having my home business. This sounds amazing right? For instance, you get to work in your PJ’s, and you get to set your own task schedule. Alright, let’s now look at the top 16 major causes of business failure and how to fix them.
But on the other side of the coin, you are still in your PJ’s ready for the business of the day, and the TV is on with some catchy programme, your kids are up and needs some attention, or your kitchen needs to be cleaned up. The truth is that our house is full of distractions, in theory it sounds great to work from home, but it also not as easy as it sounds. And some businesses just don’t succeed at home.
Causes of Business Failure: Why do people succeed working from home and others fail?
This isn’t going to be a magic formula. Do these things and succeed. Don’t do these things and succeed. However, the reasons for business failure listed below can happen to you through no fault of yours. But they are factors to be very much aware of. Remember, those that succeed don’t succeed because nothing bad or hard ever happened to them. Here are How to choose a business that is right for you
They succeed because they kept pushing, and never stop until they see the positive change in their business. Certainly they have had number of failures. But they never allowed failures to define who they are; rather, they allow their failures teach them how to succeed next time.
1. Causes of Business Failure: Lack of Focus
The first causes of business failure i want to talk about is lack of focus. Entrepreneurs can easily be distracted by too many minor tasks. It is very possible to have a shift in focus, shrinking thoughts. A good entrepreneur or business owner will never lose focus on what’s important and where his or her priorities are.
The weakest point is when they get caught up in trivial perfectionism in the tasks which can and should be left to others to do. Business owners should learn to delegate tasks. The shortsightedness manifests when DOING rather than BECOMING becomes an obsession.
2. A Hobby Mindset
Some home businesses fail because of a hobby mentality, I remember in 2009 when I started my first website, I saw it then as a means of just expressing me online, until jiji, an ecommerce website contacted me for sponsored posts and promised to pay N14,000. It was then I knew I get to be serious and take this thing as pure business.
It is very crucial to decide if this is a business or a hobby. If it is a hobby to you, then it is kind of just for funfair. If it is a hobby, there is not drive or need to make things better or make things grow, and factors like targeting market, audience, products, pricing and so on really matters when you just want to make things you love. But if you are running a real business this way, it will not succeed.
A business that must grow and yield profits is very demanding; it is not for fun or games. It is not the way you want to do it, or even doing it whenever you feel like doing it. It requires creating and sticking to a plan with a goal in mind. It is wonderful and a bonus to be able to create a business around something you love, however, it that is not center of your business. The center of your business is the services you provide or your products, your audience and ultimately your profits; anything short of these will force your business to fail with time.
3. Lack of Good Customer Care
Lack of proper customer care is another major causes of business failure. It is very important that you make your customer care a priority. A business with good customer care grows. Good customer care service compels customers to always return to you, and these returning customers bring refer other customers. If you do not treat your customer well, they will go to your business competitors. Learn to show your customers some care and love to prove that you appreciate them.
Cultivate the habit of always asking your customers questions about your service or product and offer them some percentage when they give your product a review (either positive or negative review). Remember, if you are not close to your customers, and you treat them like every other seller will do, they will only come when there is no other option left for them. I hope you know that bad customer care has killed a lot of businesses?.
4. Causes of Business Failure: Complicated Priorities
Some businesses fail because their priorities become complicated. When doing your business from home, try to give your business top most priority over anything that has to be done in your house. If you were working a 9am – 5pm would that sink be full of dishes or laundry pile on the couch be cleared? Not all. It would not. Right now in that moment your business is your priority, not the kitchen or laundry piles.
Sticking to schedule is a must. It is very necessary to finding ways to be more productive each day that passes by. Yes, you will have things coming up daily such as sick kids and any other distractions. This is one of the reasons we love working from home. You can make your own schedule. Just make sure you don’t lose focus throughout the day. If you are running a business, then give spending time on that business top priority.
5. Lack of Required Support
Some businesses fail because they lack the needed support. Sometimes your family, your friends or even some customers, don’t take you seriously. This can get you frustrated and sometimes you might feel like you don’t have the support you needed to forge ahead. You have to consider yourself a sole business owner, unlike any other person out there just making something cute in hopes it will sell one day.
The fact that you are running your business from home doesn’t mean you are not a serious business owner, however, but those doubts creep in occasionally. You must not allow anyone treat your business with disrespect, you are working hard for it! If you don’t have the support yet, then you need to find it. Connect with people who understand and support you and business you are trying to build.
Set some boundaries in your business. And stick to them. You can find support. And you can support yourself as well. You can join free business group were like minded creative entrepreneurs share their tips and talents.
6. Lack a Designated Work Area
Some home businesses fail because they lack a designated work area. This is so important. I can remember working from my kitchen table. I have been there. I would clean it off and have dinner with the family. Then get all my supplies back out to work some more.
This became so frustrating for me until I moved into my living room where I had a 6 ft plastic table and a nice chair and finally made my own little space in my living room to paint from.
Just carving out a little area in your home to be yours for your business is going to be super important. This needs to happen from the beginning. You need space to work in order to be successful. Also read 25 best business ideas for Christmas that are very lucrative.
7. Causes of Business Failure: Bad Pricing Methods
Some home businesses fail because of bad pricing methods. This is a major frustration for new sellers and more experienced sellers alike. “How much should I charge?” Is a common question we hear a lot. There is a fine line between under pricing and overpricing your items. Each time you overprice, you end up locking yourself out of sales.
However, when you under price, you may get enough sales but not make enough profits from them to sustain the business. You have to consider your costs such as the more hidden costs like wear and tear on your tools, home expenses used for your business, and your time.
Too many times when I have one a business owner go through our Creative Codebook Course and think about their pricing, they begin to realize that they are being paid pennies for their work. That isn’t sustainable. You will fail. Your business will fail. You have to learn to price correctly to make your business a success.
8. Unaccountability
Unaccountability is another causes of businesses failure. You must be accountable for any dime your business makes. Most times, many business owners could not account for their daily sales. Once there is a sale, they spend the money on personal needs believing that they will make another sale.
If you must succeed in your business, you must be accountable to yourself for every money that you make. Make sure you plan out your spending, for a business you plan to grow, 60% of your profit must go back into the business.
9. Causes of Business Failure: Lack of Real Expansion Plans
The lack of real expansion plans is another reason some home businesses fail. One thing that frustrates me and makes me super sad is when amazing business has an awesome services to render and products but no plan in place for expansion. You may feel you enjoying where you are now in your business, but if you aren’t moving forward, then you will soon fall behind.
Please put a plan in place for business growth. You need to revisit it regularly. Modify it as needed. And make forward motion in your business a big priority. If you think you are now comfortable, then it’s time to see what’s next.
It’s important to diversify the streams of revenue you have. If your Facebook page is doing well, is it time to learn to create a selling Facebook group? Are you ready to learn about the differences between Amazon Handmade and Etsy? Make a plan to grow. It really is a choice between growth and keeping up or giving up on your business. And you were made for more than failure.
10. Not Seeking Professional Advice
No matter how informed you feel you are, once you want to start up a new line of business, it is pertinent that you seek professional advice. Seeking professional advice will help you ascertain whether or not the business you want to venture into is profitable as you thought.
Most times, entrepreneurs start up a business because they find others doing the business and profiting. Yes, they might be profiting from the same business but there might be a secret behind the success. Factors such as, knowing the right source to get raw materials, location, good customer service, etc.
In everything we do in life, it is good we have a mentor that will always put us through to avoid silly mistakes. Another advantage of seeking professional advice is that these persons whom you are meeting Elon Musk, have already done the business and they have made mistakes and know the best way of avoiding them.
The likes of Elon Musk, Bill Gates and Sir Richard Branson have Warren Buffet and Sir Freddie Laker respectively as their mentors. If they had mentors, why shouldn’t you and I have one or two also?
11. Causes of Business Failure: Growing Too Fast
Another reason some home businesses ends in failure is because they grow too fast. One of the saddest things I’ve seen happen in some businesses is that they have had rapid success that they weren’t ready for and hadn’t planned to have. It is true that everyone wants a product to go viral, however, when it does, can you cope the immediate influx of orders and messages that comes with it?
Can you hire quickly and keep on top of shipping dates with clients? Often some businesses end up with customers who have left a bad review on Etsy or Amazon because of things like delayed shipping, shipping date missed, or an order slipped through the cracks. In addition, growth an unexpected upsurge in business growth can cause your Google Adsense account, Facebook, Etsy or Amazon account disabled.
When such happens, it may be difficult to come back after some number of negative reviews or issues that can come from viral success. One potent way to keep this from happening to your business is to have consistent processes in place that can handle success. And to be ready to hire some hands for your business the moment it is needed.
12. Poor Location
Poor business location is a dynamic causes of business failure. There was this business woman who had a coffee shop in a remote area; her coffees are very nice and also very affordable. She relates very well with her customers. But over the years, her coffee shop was not growing as expected and she could hardly maintain the place so she decided to sell the shop.
Another 29-year-old business woman who had enough capital felt she can make the coffee shop profitable by injecting cash into the business and making it classier than it used to be.
She also failed in making the coffee business profitable as expected. Why the failure? It is simply because of the location of coffee shop business.
The truth is that you cannot start a business in a location where your services or products are not needed. Putting more efforts to making it classy will not change anything. Therefore, good market survey is required before you chose a location for your business.
13. Given Up Too Soon
Some home businesses fail because of business burnout. They just give up. Burnout happens in every business. This is something a number of business owners will experience whether on a small or a large scale. You need to come to terms with the signs of business burnout and be ready to take steps to get back on track ASAP.
You might need to get some more training, take a small break, hire some more hands, change something about your business, or remembering why you started your business in the first place.
In business whether at home outside home, burnout is a reality we have to face, none can shy away from it. But it should not be one that will tank our business and pus us to failure. Certainly you are permitted to be tired and to need a break or be frustrated or need some help. However, committed business owners don’t give up.
14. Causes of Business Failure: Lack of Personal Growth
Many entrepreneurs do not invest in themselves yet they want to be great in business, they do not read nor research, neither do they attend seminars and workshops that could increase their capacity and knowledge base. A must in business growth is your personal development of your attitude and communication skills.
It is hard work and it takes discipline. Please be reminded that without protecting and working on your attitude you will have a hard time succeeding in business. No one gets ahead in life without building themselves with new knowledge.
15. Copying Others
What worked for Mr. Francis must not work for Mr. Reader. There are individuals who have gone into a particular business or made a business choice because they saw others doing it successfully, they then conclude in their mind that they too can be successful in it if they try. It does not always work out that way, it will do you more well if you could add your own idea after proper consultations, as that will distinguish you from others. Copying without due consultation will lead to a dead end.
16. Causes of Business Failure: Lack of Experience
Lack of experience is one of the commonest causes of business failure anywhere. If you are inexperienced or your management is made up of all novices, then your business is as good as dead from day one. When starting a new business, it is advised you get the services of people who are experienced in that field. You can make them your partners or your employee at first. In addition, employ experienced marketers and well-trained customer service personnel. Now read also top 16 business ideas for children with little or no investment.
