8 Reasons Why Small Business Owners Fail to Hit Their Goals

We know that 50% of all new businesses will fail within the first 5 years of opening their doors. Knowing this makes it easy to understand why many people feel discouraged about starting a new business. However, there are things you can do to avoid failure before starting your new business. The following are eight reasons why small business owners fail to hit their targets and what you can do to succeed in the future.

1. Lack of Preparation

Starting a small business is similar to starting on a long journey. You should have an end goal in mind; you can’t get there if you don’t know where there is. You also need to be mentally and physically prepared for the obstacles you’ll encounter along the way. If your only desire is to make money, it will never happen. It’s not just about working hard. It’s about working smart.

Answer the following questions BEFORE starting your business:

• What are your goals, and how do they align with the needs of your customers?
• Why do you want to start this business?
• What will motivate you when times get tough?
• Who is your target market?
• How can you best provide value to these individuals?
• What will it take for you to achieve success in the long run?
• How do you want your business to make an impact on the world?

Although there are many reasons why your business might be failing, be sure that lack of preparation is not one of them.

2. No Proper Market Research

Do you know who your customers are? Do you understand their needs and how they behave? Before starting a new business, it’s critical to do some market research. By doing so, you’ll gain valuable insights about your target audience, allowing you to better serve them in the future and ensure customer satisfaction.

It is important that you first find the business idea that is right for you and your skillset. Just picking an business without an in-depth research phase will ultimately lead to problems in the future. Take your time and research different niches as well as sectors to find out if your business makes sense for you.

3. No Marketing Plan

Customer satisfaction is everything, but without marketing, it’s not going to happen. Without a proper marketing plan in place (that includes the various channels you’ll use), you won’t be able to get your business off the ground and make the impact you want. You need to create a marketing plan and then immediately implement it.

Answer the following questions BEFORE starting your business:

• Do you understand the sales funnel, aka how people will find out about your product or service?
• What’s the best way to promote your company and encourage interested customers to buy from you?
• How can you stand out from competitors to be unique and offer added value to your customers?
• How will you get more people to share your content (blog posts, infographics, etc.)?
• What’s the best way for you to generate leads (via social media channels, email marketing, paid advertising) to move qualified prospects to buyers or clients?

4. Not Being Flexible

A business needs to be able to change and adapt with the times. While having a set plan is crucial, you should remain flexible if things don’t turn out as expected and frequently won’t. If your company is not prepared to go with the flow, you’ll never succeed.

5. Not Having a Realistic Budget In place

When starting a new business, the first thing is to develop a budget for both the short term and long term (including profit goals). You should also create some cash flow projections based on your monthly expenses, as well as the capacity of your business to grow. It’s impossible to determine how much inventory and other resources you may need at any given time if you don’t have a budget in place.

Answer the following questions BEFORE starting your business:

• What capital are you going to invest in this business?
• Where will it come from (savings, credit cards, loans), and how much can you spend per month?
• Can you cover all your overhead costs with cash flow alone, or will you need additional financing along the way?
• What’s the best way for you to generate monthly income (via existing customers, repeat business, new customers) during the start-up phase?
• What is the best way to scale this business so that you can generate even more money long term?

6. Not Having the Necessary Skills and Expertise

The success of your business will depend on how well your team can work together. Part of being a leader is knowing which skills and expertise your team doesn’t have (or needs to improve). Having a successful business will be difficult, if not impossible, without the right people with the necessary skills.

7. Not Staying Connected with Your Customers

You need to understand your customer’s needs and preferences if you expect to have satisfied customers. You need to read their minds. You also need to listen to all of the feedback you get online through customer surveys, forums, and social media websites (Twitter, Facebook, etc.). This will allow you to know what they like about your company and how you can improve your services in the future.

8. Not Taking Care of Yourself

The process of starting a business can be mentally and physically draining. It is essential that you eat a healthy diet, work in an ergonomic environment, and exercise regularly. Not taking care of your own physical and mental needs leads to poor health affecting your performance at work.

When starting a small business, it’s important to know what you’re doing (or at least know where to find the information). Otherwise, your dreams will never come true. The key to success lies in planning and working smarter, not harder. It all starts with proper market research and ends when you’ve achieved your goals.

Kendra Burgess

Staff Writer: Kendra Sette is a marketing strategist with a passion for helping businesses gain a competitive advantage in their market. Her motto "Build Trust and Drive Sales" can be found on her company's website with five key points to achieve this goal: content development, strategic planning for online visibility, search engine optimization (SEO), social media management strategy & execution along with email marketing campaigns that deliver results.