Over two years ago I started a business mainly because I needed some money (obviously) and most people seemed to be doing well. So without a plan I jumped on the bandwagon.I bought the products and I was good to go. Guess what! I was stuck with the products for over 6 months. Clearly this was not working.To rectify the matter, I ended up reducing the prices and giving some items on credit. Terrible idea that was! Only half of the people paid and that was it. I crashed.
We are living in an era where living is expensive and a lot of people, including those that are formally employed are trying to create a second source of income.
Below are 5 reasons your first business might have failed
1.Lack of a plan
Many people think a business is just buying and selling. Truth is it’s more than that.Every business needs direction. What are your goals? What do you want to achieve? How are you going to achieve your goals? Now, I’m not saying a ‘professional’ business plan here. All you need is just a simple plan. Know what you want and how you will achieve it.
2. Not knowing your target audience
When I started my business I was trying to sell to my friends and family and it wasn’t just working.My plan was to start with the people I know then they would spread the word to their friends. That didn’t go as planned. I wasn’t targeting the right people and I didn’t even know who my target audience was.I was targeting everyone and no one (if that even makes sense).
3. Lack of a contingency plan.
Usually when you are just starting out cash is low and having a contingency plan is almost impossible. If your business crashes and you have no contingency plan you are done. This was my case and I had to put the business on hold. This was a learning experience and I know better now.
4. Poor pricing.
When you are just starting your business it’s hard to compete with the big companies that buy goods in bulk. Because they buy goods in bulk they can afford to sell their products at really low prices and still make a profit. Don’t compete. Remember you can build your own audience
5. Not Marketing enough
Market.Market.Market. Whenever you have the chance, inform people about your products. Have an online presence (Facebook page) and join Facebook groups. Someone said the probability of someone buying is 1 out of 20. Imagine that.
Take a few minutes to think about your business. Write down what you think you are missing in your business that might take your business forward. Do something about it.