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Why do Most Businesses Fail Within Their First Three Years?

416fbf3da2a88847381b2e5da63fcc1e?s=47 The Big Unit
September 27, 2021

Why do Most Businesses Fail Within Their First Three Years?

As many new businesses are springing up like mushrooms all over Australia and the world, it may look like a child’s play to start a business. You are reading this article, which means you want to take an action to grow your startup. If you want to get more information regarding reason for business failure then visit our website. Read more: https://thebigunitdigitalmarketing.wordpress.com/2021/09/27/why-do-most-businesses-fail-within-their-first-three-years/

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The Big Unit

September 27, 2021
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  1. WELCOME TO

  2. Why Do Most Businesses Fail Within Their First Three Years?

  3. As many new businesses are springing up like mushrooms all

    over Australia and the world, it may look like a child’s play to start a business. You are reading this article, which means you want to take an action to grow your startup. You might be a motivated entrepreneur, startup business, or someone with great innovative plans. If so, congratulations for staying true to your dreams. In the entrepreneurial era, where changes are happening at a rapid pace, it is no longer enough for businesses to remain positive after setbacks and face risks. In order to grow and even survive, it is required to be capable enough to adapt the quickly changing pace of the global world. But did you know that 30 percent of new businesses fail in the first year of their startup, and around 60 percent of them collapse within the first three years. Why? Because they fail to turn their business into ‘The Big’ company. One wrong decision and it may cause a startup to fail. But what is the reason? What is the thing that makes those 10 percent stay in the run even after three years of their start? From the lack of knowledge about industry’s functionality to a wrong selection of the team, here are the top 7 reasons that make startups fail.
  4. 1. Desire to do everything yourself Yes, the idea of

    a solo entrepreneur sounds great, but the obstacles don’t always make your idea worth it. It is not just an individual that makes a business grow, but it is the collaboration and teamwork that makes this happen.
  5. Where do businesses go wrong? Startups are challenging, and doing

    it all by yourself can obviously be devastating in the competitive era. Moving alone makes it a complicated path. It requires dedication, smart work, and obviously the helping hands who will help you grow. Be it a management team or someone to market your new business; startups need different minds that work all together to grow a business. Just think of how many ideas a team could get to improve the workstyle and present your business to the target audience!
  6. 2. Setting a complicated business plan Young entrepreneurs often confuse

    the business plan with unrealistic assumptions, sloppy presentation, and vague plans. They don’t have specific goals and create complications. Poor benchmarks and wrong strategy make the business destroy in their starting years.
  7. Why does business fail? For any business, a model plan

    is the backbone. It is a fundamental building block that needs attention. Do you know the audience you are going to target? How are to going to sell your services? Is there a plan to increase your sales? With a complicated business plan, you focus on unnecessary details that entangle downs the model.
  8. 3. Using the investment too soon Investing a lot of

    dollars in a business that you have just started may even crush a company. Fortunately, you can look for chances where you can make money for your startup, and if you have money by yourself, then it is great.
  9. Where does the investment go wrong? One of the most

    naïve misconceptions that new businesses do is to use their first investment completely. Wise are those who strategize where to invest their money and how much. New businesses should not invest everything in products; rather it is better to divide in the different things such as good team, company branding, and of course promoting the products in an effective way.
  10. 4. Poor communication Besides knowing the potential customers, it is

    also required to seek attention to succeed and make them become your real customers. In many cases, customers try to contact the business, but, being a startup, businesses don’t have a plan to answer each and every query coming to them. Here, emails and social channels are a great way to reach out to people who wants to know about your business and need them.
  11. What goes wrong? The lack of a good marketing and

    communication strategy can lead to the collapse of a company. The research figures show that poor communication played a role in 14 percent of failing startups. Here, the communication doesn’t have to be one-to- one, but an automated way to translate your message to the customers. Are you using social media? Then why not connect to your customers through that and help them know your business well. This is where most of the businesses lack and fail to reach out to the people who need them.
  12. 5. Creating an unattractive product Not knowing the demand of

    customers creates a risk factor for the startups. In 17 percent of failing startups, the business failure has to do with products that are not very attractive to the user or even unusable products.
  13. Why does the business fail? Often this is because the

    team working on the development of the product is so focused on their own idea that they completely ignore the outside world. Have you thought of asking people what they are interested in? Here, feedback forms and social media reviews are great tools that helps businesses reach the audience and know their interests to overcome their loopholes.
  14. 6. Ignoring user feedback after launch It is 100% certain

    that your startup will fail if you condone user feedback and do nothing about it. The feedback is a gold mine for an emerging company. Dig in more, go to the roots, and make the product better with feedbacks!
  15. Where does it go wrong? This is the most simple

    and obvious reason for business failure. Once you have launched the first version of your product, you should always take user feedback seriously. Have the courage to accept negative feedback. Not paying attention to user feedback is your startup’s guaranteed killer.
  16. 7. Hiring the Wrong Team Employees are an asset, especially

    for a company that has yet to establish its name in the industry. Your organization’s goals, project success rate, and service quality depend on the efforts of the employees. One of the biggest startup mistakes – they try to choose cheap employees over the experienced. This leads a growing company to flop in the start as they don’t have skilled people who can help them grow.
  17. Where does it go wrong? Thinking only about money in

    start is a common mistake. Of course, the ultimate goal of all businesses is to monetize their services and increase their ROI. But can you name even one company in the world that generates high revenue without providing the customers with anything useful? Exactly, that’s impossible! Have you hired someone to spread the popularity of your business? If not, hire the skilled ones who can generate you ROI.
  18. Conclusion Your ambition is to find a gap in the

    market that no other company has yet discovered; otherwise, you won’t be interested in reading this article up to here. Many startups will arise, and many will disappear. The one that stays in business is a company that avoids all of the above mistakes and chooses customers over premature scaling. As a growing startup, you should focus on teamwork and have a great marketing strategy. Do you know why we are talking about marketing your business in the starting years? This is because marketing is the backbone of any small to large business. But how? We have given the answer to this question in our next blog; keep reading!
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    •Toll Free: 03 9000 0828 •Email: info@thebigunit.com.au Content Resource: https://thebigunitdigitalmarketing.wordpress.com/2021/09/27/why-do- most-businesses-fail-within-their-first-three-years/
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