The brains of entrepreneurs are constantly churning and we often come up with new ideas on how to further grow their businesses. Some of the ideas can be quite wonderful, while others are not so great.
Bad Business ideas
Some of these ideas could be bad enough that they cause our business to fail miserably. We may not be aware that these are mistakes, until it is far too late. We could be so excited with the ideas, that we are not aware of the obvious. In this case, we shouldn’t be caught up in the excitement that we miss the warning signs. If we do this often enough, our business could suffer. Some bad ideas could spiral out of control and lead us to financial disasters. If we are going through a financial turmoil, we should stop and think why it happens to us. It is likely that we overlook some details in our business ideas due to the sheer excitement to start improving sales and revenue. We should know that excitement alone won’t be enough to allow us to become successful. In order to make things more successful, we will need to deal with plenty of preparation and planning, along with sweat, tears and in some cases, blood. No one wakes up and finding him/herself successful. Not only successful people have good plan, they also work hard to achieve that.
No reserve Funds
This is a common reason why many businesses fail. When starting a business, we should have enough funds to fuel it. Out of sheer excitement, many businesspeople start their fund with limited cash reserves. After spending much money setting their businesses, they no longer have the money as a buffer for temporary setbacks and unexpected expenses. It is not a good idea to draw a loan on life policy insurance and retirement accounts. A business should have enough reserve funds to allow it to run at zero revenue for at least three months, including operational costs and salary for employees.
This is an obvious reason why many businesses fail and it should be a no brainer. When starting our new businesses, we should have a plan to get new clients with proven methods. In fact, it should become our daily goal to get one or a few new clients, depending on the size of our business. There’s nothing more rewarding than seeing that our base of clients continue to increase. It would be a good thing if we have raving clients who gladly refer us to the world.
No real structure in place
Every successful company has a proven system in place. The system should be clear for everyone in the business, from the lowest position to the top management. The system should be able to create a synergy within the business. Companies should have tried and true system that everyone can follow to make sure that everything will run effectively and efficiently. Think about Starbucks and McDonalds, the system remains the same no matter which outlet we visit around the world.