CKS Consulting.co.uk | Top Ten Reasons Businesses Don't Succeed

CKS Consulting.co.uk’s Top Ten Reasons Businesses Don’t Succeed

1. Inadequate Business Plan

The importance of a good, well planned business plan should not be understated. Business plans are more and more seen as the fundamental part to a successful business and no business should go forward without one. Although business plans tend to be written to appease board members, directors and investors, it must be highlighted that there are other reasons that a business plan is important to a business. You can write into it all of your plans, your marketing strategies, your competitors’ research, have a structured plan to follow and highlight any potential weaknesses before investing in your idea to ensure that your business succeeds in ways that others have not and that your money is invested in the most efficient way for your business. Without a well written and researched business plan, your business will struggle to succeed. Business planning is a long, hard slog but it is worth it in the end. Spending a little cash and time in the early stages will save lots of time and money in the long run and will be a major part of your business success.

2. Lack of Knowledge on Target Audience

Without customers, a business is nothing more than an idea. Considering this, it is imperative that as a business owner, you know your target audience, their movements, their segmentation and their buying trends. If you know where your customer lives, shops, works, what they buy, when they buy and how they do it, you can really target your market effectively in order to maximise resources whilst keeping all marketing costs low. If you are not aware of any of these things, you are probably wasting money on marketing across channels that are simply not relevant to your business.

3. Ineffective Marketing Strategies

One of the main mistakes that businesses make is to use marketing techniques that their competitors use merely due to the fact that their competitors use them. Many businesses use standard marketing techniques such as advertising and expect their business to flourish, but, with the economy as it is today, advertising is not only the most expensive form of marketing, it is generally classed as the least productive. Keeping your options open, trying and testing other marketing techniques can not only increase your business but also keep costs low.

4. Marketing Management

Monitoring all marketing techniques should come as second nature to all businesses, however, it is common place for businesses to merely advertise and not even monitor how this advertising is performing. Stop spending money on ineffective advertising and try other, more effective marketing strategies and monitor them on a small scale before spending a lot of time or money on them.

5. Underestimating The Competition

It is likely that your business is not the only one in the market place therefore giving you competition for customers. Understanding your competition, what they offer, what they do not offer and knowing their pricing and marketing strategies can only help in your quest for business success. If you do not know your competition and what they offer in terms of their product, pricing, placement and promotion then there is no way you can understand your market and gain a competitive advantage on your competition. Businesses who understand their competition in a similar way to understanding their customers will flourish as they can gain the advantage of understanding their customers’ needs whilst knowing what their competition offers.

6. Lack of Knowledge in Business Area

It may seem ridiculous, however, it cannot be underestimated how important it is to be an expert in your chosen business area. Anyone can research and set up a business but how many businesses fail due to the lack of knowledge that a business owner has in his own chosen area? Take a car sales person as an example. If you went to a car showroom and asked the sales person about a car you were interested in, you would expect them to be able to not only answer all of your questions, but also manage to explain, in great detail, more information than you could ever wish for on this car. If this sales person could not answer your questions, however technical, would you not walk away to a competitor?

7. Poor Customer Service

Again, your business is nothing without your customers so surely customer service is something that all businesses are experts at, right? How many times have you been left disappointed by anyone you have ever bought from? After being left disappointed , have you purchased from the same place again? How many places do you go back to because the sales team treat you as an individual, cater for your needs, really pay attention to what you are looking for and constantly exceed your expectations? Customer service is all about enhancing the customers’ experience with your business. It takes years to build up a good reputation and minutes to destroy a reputation. We are all aware that the customer is not always right, but we are also aware that we would not have a business without them.

8. Unrealistic Goals and Projections

Small business entrepreneurs make the one common mistake of setting unrealistic goals and projections for their business. It is all well and good presenting a beautiful business plan showing no debts and lots of income in the first three years; the problem is, how true are the figures? If you are looking for financing, a lender does not want to see projections of you paying off your business loan and becoming a millionaire overnight, it wants to see projections which consider scenarios where your business idea may not work in the way you plan and what you would do about this. It wants to see you cater for the possibility of failure to attract customers, wants to see you spend the money they lend you wisely, and most of all wants to see realistic business goals and projections.

9. Underestimating Costs and Overestimating Income

Many small business entrepreneurs make the fatal mistake of overestimating income and underestimating costs. As stated above, writing the financial analysis of a business plan is not about appeasing the investors and making your business idea look good, it is planning effectively and efficiently to follow the steps required for your business to succeed.

Never overestimate income, in fact, underestimate income and plan for the worst possible scenario. Planning like this will enable your business to flourish and will enable you, as a small business owner, to be able to tackle the business head on during an economic downturn whilst keeping your business plan realistic and easy to follow.

10. Failure to Change With The Times

Businesses need to change with the times and as technology and ease of shopping becomes more and more popular around the globe, businesses need to enhance their shopping experiences to keep their customers. Gone are the days of wandering down to your local travel agent to book a holiday, no longer do we need to even go to the supermarket to do our shopping. Times have changed considerably over the last 5-10 years and they will continue to do so as more people create user friendly and cost effective techniques to shopping. If your business does not plan for future change or, at the very least, change to accommodate the latest craze in customers’ shopping, you could be on a slippery slope to business failure. Keep up to date with the economy, check and review the latest crazes and most of all, change your business strategy if it means success going forward. Previous business success counts for nothing when your business is struggling and you are not changing with the times. This is without mentioning the media circus surrounding the economy today.

Phone: 0031 437 850 600 Mobile: 0031 627 477 238 UK Mobile: 0044 791 247 8194

Consulting.co.uk

Professional, Objective Advice