Low Cost Franchises | The Top 5 Reasons Why Some Start Ups Fail

Thanks to modern technology, it’s never been easier to start your own business, and the last decade has seen a huge boom in the number of people quitting the 9-5 to become their own boss.

Unfortunately, just because you have the tools to start a small business, doesn’t mean that business will still be around in five years. In fact, despite it becoming easier to start a business, it’s harder than ever to make a success of one. Many first-time business owners make very similar mistakes in their bid to run a successful company. Here are the top five reasons why so many startups fail – and how you can avoid them.

Cash flow

Without a shadow of a doubt, the most common reason why so many new businesses can’t get over the line into their second or third year is because of cash flow problems. Cash flow is quite a broad term – here are some of the more precise factors in new business failure:

If you want to give your business the very best chance of success, learn how to manage your money properly. This will put you ahead of a huge number of business owners who let cash flow be their business’ downfall.

A product without a market

A huge number of startups fail because they’re created a product that there isn’t a market for. A piece published by Fortune discovered that 42% of failed startups hadn’t even identified a market need for their product – they just thought it would be a great idea and wanted to go ahead with it. It doesn’t matter how groundbreaking you think your product or service is – if there isn’t demand for it, your venture won’t last.

Competition is too strong

Many industries are incredibly competitive, and if you’re trying to muscle in on a sector with some strong competition, you might find it tough. Toppling the status quo is tough, and convincing consumers to choose a market newcomer over an established brand is even tougher. How can you differentiate yourself from these competitors? If you can’t answer this question, you might struggle to make a success of your business.

Growing too fast

Every business wants to grow, but too much too soon can actually have a negative effect on the business. You may overstretch your business’ finances, you may end up rushing out a new product or taking on overheads you can’t reasonably manage. Take things slowly and let your business grow organically.

Poor business plans

If you’ve prepared your business plan properly, it will have forced you to consider the challenges your business will face in the future. You’ll have strategies in place to overcome these challenges. If your business plan is poorly thought-out, you won’t have considered the solutions to these problems, and you’ll fall at the first hurdle.

Savvy business owners can succeed in today’s market, and not all startups will fail. With drive, determination and the knowledge that will help you avoid the most common pitfalls, you too can start your own successful business.

Are you interested in low cost franchises ? At Eazi-Apps, we respect the years of skills and experience that you possess. Our aim is to build on what you can already do to ensure you the best possible chance at success.

To find out more about how Eazi-Apps can help you offer solutions to small businesses, contact us today.