How to Avoid Failure in Your Business

Many factors can contribute to business failure. Failing in business has very high odds, with 90 per cent of small businesses fail in their first year. However, your business can beat the odds by creating a good business plan. Small business owners, in particular, can prevent internal causes of business failure. 

This article hopes to provide a few simple tips to avoid failure in entrepreneurial business. It will also offer advice to help your business become a success and define business failures that can be overlooked but are easily resolved.

Marketing 

When starting a business, understanding your market and customer base is the key to success. A profitable business will thrive with excellent marketing strategies. It should be the focal point of your business plan.

Market research is very important for stopping your business from failing. The failure rate for businesses after five years is 50 per cent. Business owners should consider and investigate if there is a marketplace for the product. You should also be comparing the competition to find uniqueness in your business. 

Your marketing strategy has to be consistently excellent to keep up to date with competition and to promote your business. Advertising and keeping your product visible is key to attracting more customers. Furthermore, a strong social media presence can set your business apart from other competitors. By researching the market thoroughly, then you would be able to see what industries are providing sustainable growth.

Examining customer buying habits and seeing how your product or service can stand out above the rest will set your business up for success. Your business should be able to fill a gap or solve a problem in the marketplace. Poor marketing can hinder the best business ideas. 

RELATED: How to do market research for a business idea

Customer service

Customers will avoid a business that does not make its customer service a top priority. Listening to customer feedback will help you understand their needs and make them feel valued. This can lead to customers staying loyal to your product. 

Addressing concerns right away will help build your businesses reputation. It will also help you to address any issues that will affect your product sales. It is also important to diversify your customer base. Overdependence on one or two regular customers can become an issue.

If your business is relying on profit from a handful of large customers, and they leave, this will cause issues for your cash flow. While it is important to nurture relationships with dedicated customers, don’t become complacent with customers that have supported your business for a long time. 

RELATED: Your complete guide to reputation management 

Finances 

Keeping on top of your finances is extremely important for preventing failures in your business. Successful businesses need a good cash flow to prevent bankruptcy. Successful entrepreneurs need to pay close attention to bookkeeping and their accounts. 

Small business administrations need to be organised with the paperwork and especially their invoices. Keeping on top of your cash flow can prevent an oversight on a profit loss. 

For more information on keeping your accounts organised and efficient, visit Xero, where you can find online accounting software and packages made specifically for small business owners. 

Make sure you are not borrowing more than you can afford. Using business loans and credit cards can be appealing when you are short of capital. But this can be a serious risk to profit if your business doesn’t grow as expected. 

Starting with less money to repay can keep your business afloat for longer if there is an unexpected decline in profit.

Debt repayments that exceed your profit could lead to bankruptcy. Lack of money is one of the most common reasons for businesses to fail.

RELATED: How to do accounting for your small business

Following these tips will help your business thrive and help to prevent any mistakes that could be overlooked. Successful marketing, a good financial standing and excellent customer relationship provide the perfect recipe for success.


Now that you have more insight into how to stop your business from failing, why not start the journey to success now and check out how to create an exceptional marketing strategy.

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Your complete business toolkit

Rovva puts everything you need for your business in one place. From an accountancy helpline to a drop-in business lounge - we've got everything covered.

Your complete business toolkit

Rovva puts everything you need for your business in one place. From an accountancy helpline to a drop-in business lounge - we've got everything covered.