The most common mistakes in business

Thursday,May 01 ,2008

A business usually fails due the lack of ability of the owner, however this cause is not the only cause for business failing, there are other external factors which are difficult to predict and control: Global economy, competence etc. As mentioned before, the lack of ability of the owner is the main cause of business bankrupt.

Let’s analyze in detail which elements are the cause of failure in businesses.

1-Bad Planning:Writing an incorrect business plan or just not following the current business plan leads to failure in business, let\'s cite some examples:

The crucial element when starting a business is the monetary capital therefore is important to ensure in a correct way how to obtain that capital. The most common way is using investors and lenders, however a bad planning make investors and lenders flee usually because an incomplete executive summary.

Oh! another crappy one
Investors at the moment of reading the business plan what they look first is the expertise in the type of business to start, nonetheless if the starter is inexpert the investor will reject any offer.
The time frame when running the business plan is crucial, failing or just not respecting the required time either by desperation or any other factor release the lack of balance in the business leading it to bankrupt.

2-High prices and instability in products scare costumers. An instance of success in a business awakes the greed of the owners; it is common to raise prices disproportionately when sales increases, however the quantity of costumer decreases too, a good response from business managers is to decrease the prices again, even so some managers believe costumers get used to the new prices.

3-Continuos improvement in business is always necessary, the lack of improvements makes a business obsolete and boring, sometimes is necessary to make a change thus costumers will always want to return moreover products are new day by day. The lack of improvements in business leads to bankrupt.

4-Costumer service is essential in all business, the lack of good service generates the absence of flow in a business, because the communication with costumers is important as well as their comfort. An inadequate service achieves discontent in costumers thus the lost of them.

5-Visibility and exposition of a business is all for the business itself. Adverting and marketing is who attract the costumers. The lack of an advertising campaign is like digging the grave of the business, here is where the proverb “if you build it they will come” does not apply because people need to be convinced to visit your business.

Which is the formula to avoid failure in business? There is no formula to achieve success in a business, expertise is required and if not acquired, however to avoid the most common mistakes in business is necessary to do a good planning and always be in the shoes of the costumer.

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