Small businesses fail for one reason or another. According to Canada’s Key Small Business Statistics – January 2019, 96 percent of microbusinesses that launch stay operational for a year, 85 percent stretch to three years, and 70 percent survive up to half-a-decade.
In Canada, nearly 7,000 medium and small firms go insolvent every year. Micro-businesses or firms with 1 to 4 workers have a slightly lower failure rate than other brands. After half-a-decade of operation; 70.4 percent of micro-business continued put side by side with 66.9 percent of
Top 10 Reasons Small & Medium Business Fail
The reasons for failure vary from one business to another. Below are the ten most common causes of startup closure according to smallbiztrends.com;
- Ineffective ecommerce marketing tactics – 37 percent
- Bad SEO or invisibility on Search Engines – 35 percent
- Lack or little customer interest in their products or services – 35 percent
- Money problems – 32 percent
- Price issues – 29 percent
- Put out of business by competition – 23 percent
- Industry giants dominating a larger market share – 19 percent
- Poor customer service – 16 percent
- Hiring or staffing problems – 14 percent
- A poorly-timed launch – 11 percent
When rolling out a business, it’s crucial to anticipate all the above loopholes. Challenges also vary from one company to another, so it’s best to plan based on your risk profile. Plan everything well, including where to get additional financing.
How to a Start a Small Business That Will Thrive
Follow these steps to launch a business that will thrive.
- Develop a unique workable idea
An entire 35 percent of startups fail because they have a small or no audience for their products or services. Another 11 percent close up after a poorly-timed launch. Add to the 23 percent who fall to their competitors, and you see clear signs of half-baked or hurried ideas.
Spend quality time pondering over that plan until you’re confident it will stand out. It mustn’t be an entirely new business, but it must cause a significant positive change on your target audience.
- Plan your Financial Resources
Your financial resources include the money needed to kick off and maintain operations.
You can remedy financial inadequacies with financial backing from other sources like the SBA, Angel investors, Banks, Alternative Lenders, and whatnot.
The problem is, you may not meet the criteria for most loan products as a startup. With that in mind, you want to prepare a sure financial strategy that includes where to source a small business loan if you hit rock bottom.
- Get brand followers
Most big brands will tell you it takes time and effort to attract customers. You must organize intensive marketing campaigns to get your name out there.
In the era of digital marketing, content should be your best friend. Utilize all platforms, from social media to emails and whatnot. Switch from web copies to captioned videos or a more personal approach like “a video on an email.”
- Building a Team
Going solo seems like the best plan until you realize the work burden ahead. After all, this study found that startups that launched with teams performed better than those with solopreneurs.
The Bottom line
Most merchants perish for lack of knowledge. You want to develop a complete plan that runs from product search to delivery. Consider all the details and how each piece will fall into place. Try to walk in your customer’s shoes, and offer remedies for all the challenges you encounter.
Work with a mentor throughout the planning and launching processes to avoid missing any detail.
Michael Hollis is a Detroit native who has helped hundreds of business owners with their small business loan solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.