Every day, a lot of business projects are failing because of different reasons. About 90% of all small businesses fail within the first two years of work, primarily because many entrepreneurs do not have enough basic knowledge and experience in dealing with problem situations. Let us consider several common problems that arise during this important preliminary stage of formation.
Lack of preparation
Often, entrepreneurs can’t wait to start a business. That’s why they neglect the basic preparation, which includes the development of a competent business plan. This business plan should include a clear description and vision of your business, the main objective in the preparation of such a plan is to convince potential investors to assist you in the incarnation of your project (Goatham).
Lack of funds
Another common mistake made by many small businesses is insufficient amount of financial resources needed to launch and promote the business. Lack of funding severely limits the possibility of expanding of any project and will greatly threaten the potential growth and business stability (Carlos).
Bad marketing strategy
It is real enough to run your business and sell the best products and services at competitive prices, however, the company may appear at the risk of collapse for the reason that the target customer bases may not be aware of the products and services. Advertising is a vital factor for success in business and if the entrepreneur does not know how to sell his products to the population, he must seek assistance from the marketing experts (Goatham).
Lack of reliable employees
Salary is the largest expenditure item for many small businesses. The company must use the exact number of workers with the necessary skills and experience in a particular field. If the company picks up a lot of unproductive employees, extra labor costs will arise (Goatham).
Low level of sales
The company's sales level is a key component in the success of any project. The low level of sales serves as a warning that the business could be threatened. Companies should always be aware of the current state and prospects in the field of sales and be prepared to react promptly to any problems in this area (Carlos).
Lack of product diversity
Some companies may offer only one product or service. The lack of diversity can be dangerous, because if production stops, the whole business may fail (Goatham).
Good location can ease the struggle with competitors, and ultimately ensure the prosperity of the company. At the same time, if the company's location will not be entirely successful, it could badly affect the company's affairs. One of the most important factors that should be taken into account when determining the location of your company is the location of target consumers, physical distance from competitors, condition and safety of the building.
• carry out detailed planning of the project
• form a working team
• manage project resources and monitor them
• monitor the compliance with the required quality of the project results
• monitor the project risks and develop a contingency plan
• clearly formulate the objectives and tasks (Goatham).
Works Cited
Goatham, Robert “101 common causes”. Calleam.. N.d. Web. 12 April 2016 (a)
Goatham, Robert “Why projects fail”. Calleam. N.d. Web. 12 April 2016 (b)
Carlos, Tom. “Reasons why projects fail”. Projectsmart. N.d. Web. 12 April 2016
