Preventing your business  from failing

Preventing your business from failing

John Wooden said “Failure isn’t fatal, but failure to change might be.” When you see your business showing signs of imminent failure, it’s time you take some introspection so that you correct what could be going wrong.
Most businesses fail not because they don’t have a good product but because they fail to bring out their value proposition; that is, an innovation, service, or feature intended to make a company or product attractive to customers.

When marketing your product or service it’s imperative that you bring out what sets your business apart from competitors. Show how your business is unique from your competitors. You need to say exactly what you are doing better than the competition.
Your value proposition should attract attention and interest from your customers. That unique attribute should separate you from the rest of the pack and put your product or service on a pedestal above the competition.

You should present your company’s unique value proposition so that the market understands what you are offering them. A customer will be attracted to those features that address his/her needs and as a result, your market share will grow and this will ensure that your business survives.

A business is there to serve customers. If you neglect customers you are setting up your business for failure. You need to have your pulse on the customers’ needs by being in constant touch with your customers. Know exactly what your customers value about your product or service.
There are certain features or attributes that they like and if you don’t know those things you might stop providing those features and as a result lose your customers. Sometimes customers change their interests or what they value on a product because of a change in trends.
So a forward looking business owner keeps his eyes on the horizon watching for any new trends and how they impact on customers. You can get most of the customers’ requirements from the sales reps who should be talking to customers regularly and getting up-to-date information.
You can also carry out customer satisfaction surveys once in a while so that you know what they need. Your business will fail if you don’t stay in touch with your customers and understand what they need and the feedback they offer.
Your business can easily become irrelevant if you don’t keep abreast with customers’ needs. Nokia did that and now it’s no longer a player in the mobile phone business because it failed to keep abreast with customers’ desires.

Some businesses fail not because the business idea is bad but because the entrepreneur fails to structure the business model properly. Investopedia defines a business model as the way a company generates revenue and makes profit from its operations.
A business is bound to fail if an entrepreneur builds a business on a model that is not sound, by pursuing a business for which there are no proven revenue streams.
This usually happens if the entrepreneur does not draw up a business plan through which he can test his business idea.

The best way to build a good, tried and tested business model is to research and review how other businesses in the industry you intend starting your business are operating and generating their revenues.

After that review, you should prepare a detailed business plan that will question all assumptions and indicate how revenue streams will be generated and how reliable those revenue streams are.
Some businesses fail due to rapid growth. Growth should normally be positive but however, unplanned rapid growth can be disastrous because if a business grows much faster than it can keep up with the growth, it might be inundated with orders which it is not able to fulfil because of lack of funding to fund stocks and meet the orders.
If customers cannot get their orders delivered they will not take you seriously and so will leave you and move on to other businesses. In some cases, you might overestimate the demand of your product.

You might be so convinced that your product is going to take the world by storm and as result you invest heavily in stocks, logistics and manpower but if the business fails to pick up as anticipated you will be left with so much stocks and human resources which you can’t fund and the business ends up failing.

You need to plan your business very carefully. You need to draw up a business plan which looks at your strengths, the market, the local demographics and their spending trends, any future local government development plans that might impact on your business and ensure that you gear the growth of your business based on these trends.
Carry out surveys if possible so that you have an idea of the market. Avoid getting too much inventory unless it’s justified by demand. Recruit staff as dictated by the demand of the product. Following the above will ensure that you avoid unnecessary business failure.

Don’t give up when you face challenges that seem insurmountable: hold on, try something different until you succeed.
Zig Ziglar said “It’s not how far you fall, but how high you bounce that counts.” When you fall don’t remain floored. Challenges are bound to come in business. Face them and be creative in dealing with them.

l Stewart Jakarasi is a business & financial strategist and a lecturer in business strategy and performance management.
He provides advisory and guidance on leadership, strategy and execution, preparation of business plans and on how to build and sustain high-performing organisations.
For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts: sjakarasi@gmail.com or +266 58881062 or on WhatsApp +266 62110062

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