Over 5,000,000 new businesses are started each year, but millions will fail, and most new businesses fail for the same sets of reasons. Here are 8 common mistakes why start-ups fail. Please avoid them.
1. Choosing a bad business opportunity
2. Choosing the wrong customers
3. Trying to sell the wrong product
4. Selling for the wrong price
5. Overestimating the number of and the speed of the customer purchases
6. Mismanaging the business
7. Failing to hire and retain the right people
8. Being unable to grow or scale the business to accommodate growth.
Basically, there are two ways to increase your chances to entrepreneurial success. One – learn the business – work in and learn a business before starting a similar business. Learn about the suppliers, the customers, how to operate the business for some years and then go and start a similar business. Examples: Starbucks, EDS, Wal-Mart and Intel. Two – start your part-time business – keep your day job and begin your business at nights and on the week-ends and build it up before quitting your day job. Examples: Ford Motor Company.
Remember three business rules:
#1. Follow the money – cash is king.
#2. The sole purpose of business is to serve customers.
#3. Customers know best what they need.