5 Reasons Many Businesses Fail in the First Year



Thousands and thousands of new businesses startupevery year, and many of them do not even make it through their firstyear. There are many reasons that businesses fail all of the time, andthey can range from bad products to bad management.
Some people thathave been successful in business do not always become successful ontheir first try, sometimes you have to live and learn and a failedbusiness venture will help you learn what not to do if you plan onstarting another business.
If it is your first time business venturethen you should take a good look at failed and successful businessmodels, this will help you understand some of the things that work andother things that do not work.

5 Reasons Many Businesses Fail in the First Year

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Lack of Experience



Lack of experience at running a business is one ofthe big reasons many new start-ups fail within the first year or two.Just because you do not have a lot of experience does not automaticallymean that your business will be a failure, but knowing this is a bigreason for business failure should motivate you to learn the ins andouts before jumping in head first.

There are plenty of places you canlearn what needs to be done, you can research online and find advice and stories that will help you gain some insight into running a business.Another thing you can do is ask someone you may know that runs their own business, pick their brains for a while and allow them to be a mentorto you. This will increase your chances of making your business asuccess after the first year and for many years into the future.Knowledge is key, so learn everything you can before making the jump,and don’t let lack of experience keep you down!



Bad Management

Bad management is another of the main reasons thatmany new businesses fail, some can say this is due to lack of experience and that could be true in many cases, but not all of them. There havebeen many people that have started new businesses that had plenty ofexperience but because of bad management choices the business fell flaton their faces. Bad management can take many forms; one of these couldbe bad management of finances which can cause a business to go downhillreally fast.
This is one of the reasons it is a good idea to hire anaccountant to help manage the financial part of any business, someonethat knows what they are doing can help eliminate the business failingbecause of bad money management. Another example of bad management ishiring people to run the business for you and not paying attention atall to what is going on.
Some people think they can just start abusiness and hire people to let them run it right from the get go, butIn most cases this is just setting yourself up for failure. If you dohire people to manage and help run the business you should still alwaysknow what is going on, plus you need to trust the people you haverunning your business. Monitoring every aspect of your business willensure that things go well and it is the only way to do it as a startup.

Lack of Planning



Sometimes people have all of the right intentionswhen starting a business, but many times people get anxious and excitedand start the business right up with little or no planning. Having abusiness plan laid out before you launch is key, and this is extremelyimportant if you are looking to get some help funding the business atthe start up.
When you are trying to get a loan to launch your companyalmost all banks want to see your business plan, so this is the firstthing anyone should do when starting a new business endeavor. Lack ofplanning can hurt in many other ways as well, another example is nothaving enough products to meet the possible demand you may encounter.
Thinking everything through beforehand is a must, as well as knowingwhat you need to start off successfully. There are many organizationsthat can assist you in starting a business for the first time, andseeking out one of these types of organizations to help you get goingcan be a big help and will definitely make sure you have plannedeverything out so your business has a great chance of being a success.

Location



Location can be extremely important when you arestarting a new business, you could have an amazing business idea and agreat building but if your location is somewhere that people will notfind it easily it could turn out bad for you. It is good to find a place where many people will see your place of business so you will get walkins and people coming by to check out what you have to offer.
Sometimeseven a struggling business can pull it together and survive if they have the right location, and on the other hand, you could have a great store or other type of business that is amazing but if it is not in a goodlocation the business will most likely fail no matter how good it is.When starting your business try to find a location where there ispotential for a lot of people to see it, this will help more than youcan imagine and will be the key to your success.

Starting a Business for the Wrong Reasons



There are many people that start their businessesbecause what they offer is something they are very passionate about, and then there are also many people that will start up any business thatthey think can make them a lot of money. If you plan on starting abusiness make sure you are starting something that you have a stronginterest in, because if you are not going into something you love yourchances for success are very low.
If you are not passionate about whatyou do other people will see that and in many cases customers will findanother company that does the same thing but is run by someone whoreally cares and knows all about their products and services. Peoplethat only want to make money with a business tend to only botherlearning a little about what they are selling, but in order to besuccessful you need to know EVERYTHING about what you are doing, andthere will be many questions from potential customers that you need tobe able to answer.
If you cant answer the questions or do not have theexperience people will just go somewhere else. So if you are starting anew company make sure you love what you will be doing, otherwise youwill most likely  fail in under a year.
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