Business experts and economists constantly say that the first two years of business is the most crucial. It tells whether a business would succeed or fail. But considering that the business get through this point, the 5th year sets another test. This is due to the reason that around half of small businesses are beginning to dwindle down. This is also backed by US Small Business Administration.
Why a Business Fails?
The common reasons that were cited for the failure of business include but not limited to:
- Poor location
- Poor management
- Unexpected growth
- Personal use of funding
- Over investing in fixed assets
- Lack of experience
- Poor credit arrangements
Though, even some of the established and profitable businesses are deciding to shut its doors.
An inexistent or poor business plan is oftentimes the root cause why a business is failing. Effective business plan serves as the defining goal of business owners.
This at the same time is formulating road maps in reaching those goals.
The Single Factor Dictating Your Business Success
Business plan must be able to identify its sales projection, market, customer needs, price range and special niches. This also contains marketing strategy, management plan, short and long range goals as well as budget.