| Starting a business of your own has a lot of benefits | | | | • Dependence too much on a single element: |
| such as being your own boss, facing new challenges, a | | | | Small business owners must be careful against |
| high growth potential and reaping all the rewards of | | | | offering just a single major product service or having |
| your hard work, however, success in a small business | | | | just one big client. Though this might be the major |
| can never be taken for granted. Entrepreneurs who | | | | source of profits they must think of what might |
| want to run their own small businesses cannot afford | | | | happen when they no longer have the source and try |
| to ignore the difficulty of starting a business. The | | | | to broaden their horizons. |
| following are the primary reasons for small business | | | | • Competition: |
| failure | | | | Competition is a major factor influencing the success |
| • Lack of planning: | | | | or failure of small businesses. Therefore it is necessary |
| Not having a proper business plan is a major pitfall that | | | | to identify the exact nature of competition, their |
| can lead to failure of a small business. A SWOT | | | | services and how our products/services are superior. |
| analysis is necessary to be able to overcome | | | | • Poor marketing: |
| difficulties during its growth. A business plan gives | | | | The success or failure of a product can depend on |
| proper direction to the business. | | | | good marketing. Therefore it is important to research |
| • Trying to make a hobby into a business: | | | | every marketing method used and stick to those that |
| Not every hobby can be transformed into business. | | | | are yielding results. |
| Before planning to start a small business, the idea must | | | | • Entrepreneurial exhaustion: |
| be thoroughly researched for its feasibility. | | | | Having a small business requires patience, capital, time |
| • Inexperience in managing a small business: | | | | and energy. Not every individual is cut out for it. Long |
| To run a small business successfully it is necessary to | | | | work hours can cause exhaustion and lead to a lack |
| be familiar with several aspects of the industry, its | | | | of interest in the business which can stunt its growth. |
| trends and possess the skills necessary to market | | | | • Faulty location: |
| one’s products and services. Inexperience in these | | | | Visibility is very important for the small business. If the |
| aspects can result in failure of the business. | | | | store is not easily found by clients and suppliers, profits |
| • Poor record keeping and financial controls: | | | | could suffer. |
| Not maintaining good accounts of profits and | | | | • Poor selling techniques: |
| expenses, taxes etc is also a cause for small business | | | | Business fail if owners are not able to get potential |
| failing. | | | | customers to buy their products. |
| • Entrepreneurial enthusiasm: | | | | • Postponing tasks and improper time management: |
| Entrepreneurs must learn to differentiate between | | | | Deferring important tasks can be lethal to a business. |
| "true opportunities" and just new ideas that are not | | | | Staff can be hired if necessary for doing tasks that a |
| practical. It is necessary to compare the idea with the | | | | business owner doesn’t like to do. |
| business plan objective and see if it the skill and time is | | | | • Inferior quality customer service: |
| really available to put the idea into practice. | | | | A bad quality customer service such as not replying |
| • Inefficient money management: | | | | quickly to emails, phone calls etc can lead to customer |
| It takes about a year or two for small businesses to | | | | dissatisfaction. Also, not giving the customer what he |
| make profits, so not having proper resources can | | | | wants may weaken the bond with the small business |
| hamper the growth of the business. Also, personal use | | | | owner. |
| of business funds must be prevented. | | | | |