• Unbalanced experience or lack of managerial experience
Check The Ultimate Guide to Crafting a Thriving Business
An internet entrepreneur cannot succeed if they don’t have the right mix of managerial experience and worse if they lack this experience altogether.
This factor comes next to incompetence as a primary contributor to business failure, representing up to a full 30% of small business failures. It is manifested primarily by:
No time to read the summarily list? Click here to read List of 90 reasons why 90 percent of online businesses fail
Reason #28: Poor credit-granting decisions
Knowing that giving credit facilities to a customer is one of the means of grabbing their custom, some new internet entrepreneurs do not take the necessary precautions and have accounts receivable pile up.
Reason #29: Inefficient or inexperienced management
Managers of bankrupt firms begin their enterprises usually with little or no knowledge, experience or vision of how to handle the multiple facets of a business such as advertising, employee relations, financial management and other essential tasks.
Reason #30: Inadequate inventory management
Excess inventory, slow moving or obsolete ones equate to tying up your money in products of little or no value at all to your business.
Reason #31: No knowledge of suppliers
Companies which want to last in the market try to know their suppliers well before working with them. Matters such as their trustworthiness, respect of deadlines, adherence to regular supplies, quality supplies, financial standing, checking with their existing clients, terms of payments, modalities of payment, credit facilities, etc. are thoroughly checked before committing with them.
Reason #32: Poor or Non-existent Marketing Programs to entice Customers
Have you heard the saying ‘If you build it, they won’t come — until they hear about it’? It’s true: prospective customers will not find you automatically just because you have created a company. You must reach out to them right from creation through understanding of their demographics and psychographics.
The most common of some of the numerous ways in which successful companies market their business are through:
Reason #33: Wasted advertising budgets
Any advertising which does not bring the desired results is a waste of your efforts and advertising budget. Besides, if you’re sending promotions to people who aren’t interested in your offers, you’d be labelled as a spammer.
How can you avoid this?
Entrust this task to a specialist.
Reason #34: Fraud, natural disasters and neglect
Ignoring, disregarding or leaving tasks uncared for can only make your business suffer. As for fraud, it can milk your business dry. If those two events can be avoided, disaster however, often strikes unannounced.
Reason #35: Poor Human Resource Management Skills
Your most important asset is your employees. And it is known that some customers do business with a particular company because of the people that they deal with there.
An employee who is not well treated may decide to leave. Quality and output therefore suffer, leading to customer dissatisfaction and a decline in your business.
Reason #36: Not Measuring Goals and Objectives
As the business begins to grow rapidly, the owner gets caught up in the humdrum routine of meeting demand, and devoting time to keeping good records may simply slip their minds.
However operational goals and objectives are only useful for your business if you measure how well your business is performing against them.
Reason # 37: Lacklustre execution of goals and objectives
But in case you cannot track the goals and objectives yourself, entrust the task to an employee. Yet just giving this duty to an employee doesn’t mean it will be effective if not handled well.
Reason # 38: Wrong Reasons
Some small business owners started their business simply with the idea to get rich. This can lead to huge disappointment making the person to be caught up in the addiction of always looking for get-rich-quick schemes.
Reason #39: Fast and dangerous
Just as on the road, speed kills in business. At best, it gets the entrepreneur worn-out. So instead of failing at the speed of lightning, it would be better for you to grow at a tortoise’s pace.
One of the business strategies which can make the difference between failure and success for the online business owner is marketing which will be the topic of discussion in the following piece.
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Want to read the extended piece? Click here to 90 reasons why 90 percent of online businesses fail – Part III