Ten reasons why businesses fail

Launching your own business can be exciting, rewarding and liberating – but it’s not for the fainthearted.
After all, if it was easy, we would all be doing it. So, before you take the leap and head out on your own business adventure, there are plenty of things to consider.

The first is that new businesses fail in large numbers year in, year out. This is set out in stark detail in latest figures from the Office for National Statistics, which reveal that business failures went up from 283,000 in 2015 to 328,000 in 2016, 11.6 per cent of active companies. This was more marked in London, with a 14 per cent failure rate.

The finance and insurance sector had the highest business failure rate at 17.0 per cent in 2016, with business support and administration at 15.4 per cent.

If you are committed to realizing your dream, that won’t put you off – and to avoid becoming another statistical casualty, it’s important to understand why businesses fail. You can never predict the future and billionaire tycoon Warren Buffett summed that up when he said: “In the business world, the rear-view mirror is always clearer than the windshield.”

But you will increase your chances of success by learning from the mistakes of those who failed and getting off on the front foot. A good starting point is to use a company formations to do all the set-up work for your new business, leaving you to concentrate on the challenges ahead.
Here are ten common reasons why companies fail:

Poor cash flow is a killer

This is the death of many otherwise healthy businesses. It’s no good having a full order book if you cannot get the cash in to pay your suppliers and lenders, not to mention the wages of your staff. Keeping on top of outstanding invoices and having a plan in place to keep it flowing in is crucial. That means what is known as ‘positive cash flow’ should be right at the top of any entrepreneur’s priority list.

It is the lifeblood of small and medium enterprises and is critical to sustaining and growing a business. So, remember the old saying: ‘Turnover is vanity, profit is sanity and cash flow is reality!’

No plan means no future

If you don’t have a plan you won’t have a business in the long run. It’s simply not possible to ‘wing it’ and make a success of your new venture. You will need a detailed plan setting out objectives for the months and even years ahead. Once that is done, it’s important to share it with every member of your team to get ‘buy-in’, feedback and suggestions from the ‘shop floor.’ Remember too that no plan should be set in stone. It should remain flexible and be adjusted as you go along in response to changes in your marketplace. Having the metrics in place to measure its success – or lack of it – is another must.

Look after your customers

Fail to look after your customers and you are preparing to fail. Good customer service can literally be the making of a business. That means listening to them, dealing with complaints promptly, conducting regular research and generally over-delivering on your promises. Delivering value to customers makes excellent business sense, for a number of reasons

  • It’s cheaper to keep existing customers than chase new ones.
  • It builds your reputation – every unhappy customer will tell 10-15 people about their experience, according to McKinsey.
  • It reduces churn – a report by Accenture found that the key reason customers leave is poor service, more so than pricing.
  • It allows you to stand out from the competition – if two companies offer the same product or service, the one that looks after its customers best will usually prevail.
  • It boosts the bottom line – it stands to reason that happy, loyal customers will return again and again to spend their hard-earned cash with you.
  • Good customer feedback from regular surveys can be used as a marketing tool

Relying on key clients is risky

Who are your biggest clients? What would happen if you lost one or more of them? By all means pop the champagne corks when you get a big customer, but then go out and get more. Businesses that rely heavily on a small number of customers are highly vulnerable – if one or more of them pulls the plug and the business fails it means their customer base is not deep or diverse enough. Even if they stay with you, what happens in the event that the customer goes bust? There is no room for complacency – you must never rest on your laurels. Just ask any failed businessman or woman who did. Always have a Plan B and make ongoing business development a core part of the daily routine.

Keep control of the costs

Just as keeping on top of the cash coming in is vital, so is maintaining a tight grip on what you spend, even when business is booming. Keeping a close eye on your outgoings should be a daily reflex action and the importance of it should be instilled at all levels without making people feel as if they are working for Scrooge! Once you let your costs run away, getting them back under control is an uphill struggle and will involve many painful decisions, which often involve people’s jobs. Better to keep things tight and not only will you be better place to copy with a downturn, but you will also have the confidence to be generous when it is merited, such as paying for the staff Christmas party.

The value of leadership

Former United States President Ronald Reagan once said: “The greatest leader is not necessarily the one who does the greatest things. He is the one that gets the people to do the greatest things.”
The true leader sets the tempo, the tone and the objectives. He or she also has a vision and can inspire others to share it and once that’s done, lets people get on with their jobs while they focus on the bigger picture. Micro-managers are not good leaders! There are key leadership traits and the more of these you have, the better. They include:

  • Honesty
  • Transparency
  • Confidence
  • Patience
  • Decisiveness
  • An open mind
  • Positivity
  • Generosity

Building a strong team

You might be a genius, but in the long run you’re only as good as the team you have around you. Recruiting people with the right skills, potential and attitudes is an important first step, but it doesn’t end there. They need to be motivated, stimulated and rewarded if they are to flourish and stay with you. Avoid creating a ‘them and us’ culture and adopt an open management style instead. Give regular constructive feedback, adopt flexible working practices, celebrate successes, arrange social events and deal with any problems promptly and fairly and you will be well on the way to building a happy and productive work environment that has a positive impact on the bottom line and keeps staff turnover low.

Robust technology solutions

Like it or not, technology is at the heart of every business and it’s vital to get your infrastructure right. The systems you employ in your business can be crucial to your success, or contribute to your failure. Good technology increases productivity and improves cash flow and profitability. It also protects your business from breaches of security and loss of valuable data and all the disruption and cost that brings. That means a cost-efficient, future-proofed plan for your business systems covering CRM, finance and all other departments should be one of the first things you draw up before embarking on your new venture.

Marketing is not a luxury

The definition of marketing is ‘The action or business of promoting and selling products or services, including market research and advertising.’ Don’t let anyone tell you this is a luxury. Your new business needs an excellent, measurable marketing and communications plan and you ignore it at your peril. Merely opening for business and building a website does not count as effective marketing! Nor does the opposite approach, a scattergun approach where you are marketing yourself on every available platform. No matter what business you are in, you need to do your research and concentrate on the platforms that will put you in front of new and existing customers. If this is not your area of expertise, employ someone to do it for you, or if it makes more financial sense, bring in outside contractors to work with you on your marketing plan. Find out more at The Marketing Society.

Too much too soon

Your business can be a runaway success, with everyone wanting your product or service and still become a casualty. Rapid growth and over expansion are common contributors to business failures, with even the biggest concerns coming a cropper. This is often caused by initial success mixed with over confidence or a desire to capitalize on high demand. The result is that companies often expand at a rapid rate, borrowing as they go and leaving themselves highly vulnerable to market changes. Others launch before they are ready and then cannot cope with demand, while ordering too much stock can also take you down if you cannot shift it quickly. Far better to grow organically and in a carefully planned and researched way than let a corporate rush of blood to the head take you over the edge.

Last but not least, you will never succeed if you cannot deal with failure. Some of the world’s biggest business names have suffered setbacks along the way. If things do go wrong, don’t give up. Dust yourself off, learn the lessons and go for it again!

How Should A Business Expand In The Modern World?

The best businesses in any industry will strive to constantly grow. And that should be the goal for your business. If there’s ever a point at which you put up your feet and congratulate yourself for a good job then you’ve taken your hands off the wheel. The industry is always changing, and that means your competitors are always changing. If you’re going to be a cutting edge company then you need to constantly modernize and reinvent your business model. But how should a business expand in the modern world? Here are a few ideas.

Team growth.

In today’s world of business, many companies are taking more of a people-centric approach to their daily operations. Great entrepreneurs know that the growth of their team will lead to the growth of their business. For that to happen, you need to treat your employees well. Reward workers for exceeding expectations; this will encourage the rest of your team to try harder. In turn, productivity will increase. Make sure you give the team a nice environment in which to work too; ergonomic chairs can go a long way, for example. Value your team and they’ll value the company.

However, make sure you don’t forget one of the most integral members of your team: you. Obviously, you need to value your employees as important components of the company’s operations, but somebody has to lead the way. As the boss, it’s your job to guide your team to success; a good entrepreneur doesn’t just delegate. If you want to improve then you should not only keep researching the market but keep studying on a personal level. You might even want to get an online bachelor’s degree in organizational leadership to improve your management technique. If you can lead your team more effectively then you’ll be able to grow as they do.

Online growth.

Your business also needs to expand online. In the modern age, digital growth is vital. Make sure you focus on your company website; you should be aiming to climb the search rankings. Focus on keywords and backlinks. Even page titles and meta tags are important. Your objective is to please search engine algorithms. SEO will lead to traffic growth, and that’ll lead to increased sales. But you should be doing more than simply pushing higher numbers of visitors to your site, of course. You need to make sure that you maximize the number of visitors who convert to paying customers. To achieve this, your content needs to be engaging. You need a responsive layout that looks good on all devices, you need a simple payment system, and you need concise content that gets to the point. If you can achieve this then you’ll increase traffic and sales. That’ll help your business to grow.

Brand growth.

Any business that wants to expand in the modern age has to focus on its brand. We’ve talked about increasing productivity and sales, but stable business growth comes from an expanding client base. Your company needs to develop a brand that really connects with the target market. You’re trying to maintain your audience rather than simply chasing new leads. Otherwise, your business can’t enjoy stable long-term growth. Maybe you could create a better brand image by giving vouchers and discounts to customers. This will show that you value them and enjoy them to stick around. A caring brand impresses the market in the modern day.

Top Tips for any Tech Startup

The tech world is full of innovation and one of the ways that it’s often brought to the forefront and the public eye is through tech startups. These innovations are usually presented as solutions to everyday people’s problems. You may have an interest in technology as well as a flair for innovation and be thinking of launching a startup as a result. There are certain things you should know before diving in and getting started. You may find that there are a few top tips that you can take from this article that can help you as you venture out into starting up your business.

Keep Your Accounts Separate

At the incipient stages of launching a tech startup, it’s advisable that you open a separate account for personal and business finances. If not, you could end up mixing up the two and throwing your finances off course. If you’re having difficulty opening an account, it could be because you have a negative listing on ChexSystem. You should follow the suggested steps on https://www.crediful.com/get-out-of-chexsystems/ to get out of it and ensure you can open a checking or savings account if need be. To help you keep track of your finances and avoid any mix-ups, it may be best to hire a financial advisor or accountant who can help you stay on top of this.

Spend Investment Dollars Wisely

Many times, you will find that tech start-ups need robust amounts when it comes to investments. This is because they can be capital intensive and the financial burden can be exhausting when placed on a single person. To increase your chances of success, if you have been fortunate to be able to secure funding, ensure you invest the money in the best way possible. The reality is that you never know when the opportunity may arise again, so make the most of it while you have it. You can do so by choosing a quality team, not spending ahead of need, and hanging on to valuable resources the best you can.

Get Enough Market Research

The best people to give you advice on your products and services are the people that are going to be using it. In light of this, make market research an ongoing target in your organization. Get people to test your products and then gather as much feedback as you can. Use that to better what you’re putting out on the market and give your business a competitive edge. Remember that the user experience should always come first, so their opinion definitely counts.

Drive Innovation

As mentioned above, at the foundation of any successful tech start-up or business is innovation. You should, therefore, be thinking about how you can produce fresh and solution-focused ideas. In order to be innovative, you have to think about what your customers need and what their pain points are. Once you’re able to figure this out, you can begin to drive true innovation. In addition to a knowledge of paint points, deep product and tech knowledge, as well as a foundation of engineering expertise, should go a long way too.

Be Patient

In this day and age of social media, live videos and seeing things happen in real time, it can be easy to think that overnight success is common. However, it’s imperative that you know that any success you see likely began with hard work, defeats and then victories. In light of this, remember to be patient and trust the process knowing that if you’re resilient and persevere, you’ll likely get to your destination in your start-up. Focus on learning from your mistakes and looking for ways to improve your products and services at every given opportunity.

Get a Reputable Law Firm

Having legal backing as a tech start-up is absolutely crucial. You never know where your next lawsuit should come from, so you want to be fully protected. When drafting contracts, you want to be sure the right wording is used and there are no compromising clauses or phrases being used that could put you into trouble. However, legal services can be expensive, so it may be best to see if you can negotiate a deal where you defer fees until your raise investment capital if you haven’t done so already.

Starting a tech business can be an exciting new venture. The many people who have paved the way before you have left key lessons behind regarding how to increase your chances of success. You should, therefore, learn from their mistakes and successes on your journey to start your own.

4 Elements of a Seamless Web Design

Web designers are in high demand these days because of their invaluable contributions to the digital world. Without them, you probably wouldn’t come across the many aesthetically pleasing websites that you do today. Their skills are the reason you’re reading this blog and can easily navigate around. There are certain characteristics that make up a good web design like user friendliness and visual appeal which will be expanded on below. Whether you’re reading this as a web designer or someone who needs a website design, you may find that there are a few gems that you can take from this article.

Easy Navigation

Have you ever been on a website and found that one of the first things you felt was confused? You want to avoid putting users through this by creating a site that’s easy to navigate around. To begin with, when trying to create easy navigation, your goal should be to give them clues regarding where they are and where they need to be. One way to do this is by streamlining your navigation bar and making sure there’s only one. Integrating the search functionality should also help them find anything that isn’t obvious to them by browsing through the homepage. Additionally, use breadcrumb trails as they typically behave like a map that takes up little space, helps users track their location, and helps them easily get to other parts of your site.

Visual Appeal

 

 

You want any website you design to be visually appealing to users as it’s likely to keep them on the site longer. To enhance the visual appeal of your site, start by making sure the content is clearly visible as well as readable. When designing, you should have both ease of use and ease of comprehension in mind as it’s often more important than fancy design. Also, avoid using blue text for anything other than links as users can interpret it as a clickable link. One last tip is to try and avoid pop-ups before the user has engaged with the site because it could result in them leaving which you don’t want.

Site Speed

 

 

Any seamless web design should take speed into consideration as that’s a critical element for users. It is unlikely that online users have the patience to remain on a site that’s loading slowly and hanging when they could easily exit and go to another site. You should, therefore, think about the images you’re using and make sure they’re optimized, so they don’t make your site slow. If you find you’ve done all the necessary things to make sure your site loads fast and it doesn’t seem to be working, you may need to look for cheap VPS hosting because you’re likely to experience zero loading time with that.

Well Formatted Content

 

 

On every website, you’re going to find content, so how it’s arranged is important. Seeing as the average internet user skims through content, you need to make sure your text is easy to scan. You can do this by breaking up large paragraphs, using images and infographics, as well as using subheadings as well.

Seamless web design is something that can be achieved. Although every website serves a different purpose, there are common denominators that make it a memorable experience for the user as mentioned above. Try and keep them in mind next time you’re building a website.

You Can Lead A Customer To Your Business Blog, But Can You Make Them Buy?

If you’ve been in the business world for a while, you probably know a little bit about the importance of blogging. This new form of marketing involves creating content to spike interest rather than promote. A successful business blog will have posts about everything from current affairs to seasonal care. A lawyer’s blog may discuss recent cases of note. A retail blog may include posts on how to dress to impress. Neither of these ideas involve direct marketing, yet they can work wonders at leading people to your business website.

And, you don’t need us to tell you that leads are essential if you want to see sales. The more people who come onto your site, the better chance you have of converting. That’s a goal any business will want to work towards. The only trouble is, leads from your blog won’t necessarily convert as much as you might like.

The fact is that blog leads are different to those from platforms such as social media. When you publish a blog post, it may reach readers who would never have searched for your products. What’s more, these people will click on your site without any idea of what you do. This is good for finding customers from new places, but it also makes leads here harder to convert. If you aren’t careful, people will read your posts and click away. That’s the downside of indirect content like this. If this happens often, you may find yourself asking whether blogging is worthwhile.

But, we’re here to tell you that it definitely is. There’s a reason the business world is going crazy for methods like these. That said, they aren’t a walk in the park. You can’t merely press publish and hope for returns. Instead, you need to learn how you can use blog leads once you’ve hooked them. And, we have some pointers to help you do it.

Use your margins

Bearing in mind that these new customers don’t know you, it’s first worth putting your margin space to good use. A blog page, like any website, will have ample room for advertisements. While an obviously promotional post will turn customers away, we’re all used to ads in margins. All you need to do is make sure that your products are the only ones you place here. By putting offers and products in this space, you show everyone what you do without having to tell them. And, everyone knows that showing reaps better results than telling. Admittedly, you may still find that ads don’t gain everyone’s attention. But, if people like what they see in your blog, there’s a higher chance of them clicking on these at the end of their visit.

Analyze your successes

Over time, you’ll come to find that some blog posts see a higher interest and conversion rate than others. This, in turn, can help towards securing sales in the future. If you notice a lot of sales coming from one blog post, for instance, you only need to ask yourself why. Often, this has to do with the way information is portrayed, or the subject chosen. It may even be down to nothing more than your selection of keywords or your time of posting. All these things can play a significant part in your successes. Even better, recognizing patterns like these doesn’t have to be hard work. By turning to content marketing tools like the First Impressions app by Zag.ai, you can discover exactly which content works best and why. That, in turn, frees you up to create more of the same so you can enjoy increased sales.

Link every article back to your products

This point is perhaps the hardest for most of us to get our heads around. Isn’t the whole purpose of this content its lack of promotion? In many ways, yes. But, by getting smart with topics, you can find less obvious ways to link back to your products. The best way to do this would be to use internal links within your posts. These are good news for your SEO prospects at the best of times, but they could also work wonders for sales. By linking back to products on your page, you increase the chances that readers see and buy your goods. The key is to keep this from being too forced. No one will have respect for you if you ram the joy of your product down their throats. Readers will click off before finishing if you do this. But, by respectfully pointing out how your products are relevant, you can start to see success. Say that you’re writing an evening self-care post. If your company sells bath bombs, you could drop a link in the ‘evening bath’ section of your post. You don’t need to point this out or refer to it any real way. Just leave it there and let it work its magic.

Use exit popups

When you first enter a website, pop-ups are the last thing you want to see. As such, planning your popups to appear straight away would be a mistake. Far from converting leads, this would lose you viewers. Still, there’s no denying that popups have their place. These are a way to let blog customers know what you do as a company. They can also provide calls to action which are invaluable to conversions. By urging readers to sign up for a newsletter, for instance, you can keep leads hooked. Then, you can ease your way to a sale. But, what can you do if you can’t place these at the start of a visit? Stick them at the end, of course. Popups are a whole lot less likely to annoy if a customer is already clicking away. At the worst, they can press back again. At best, they’ll have seen enough to encourage them to sign up. While this method does involve playing a long game, something as simple as an email address takes leads a lot closer to sales.