Entrepreneurship is exciting, but it’s not for everyone. To deliver the desired results, it takes years of hard work, dedication, and passion. Precisely because of that, more than 50% of startups fail in the first five years. And, one of the main causes of business failure is the lack of time and involvement.
When launching your business, you shouldn’t treat it as a fast path to money. It’s your brainchild, a long-term investment into your entrepreneurial future, and you need to treat it accordingly.
Here are a few warning signs that your business is failing because you’re not treating it seriously.
You haven’t registered your business yet
Entering the entrepreneurial waters without registering your business is a huge mistake.
First off, it positions your business as authoritative, telling your partners and customers that you’re not a scam.
Registering a business is also important for your future growth. For example, you won’t be able to hire full-stack employees if your business is not registered.
Additionally, if you want to boost your cash flow and take out a bank loan, you need to prove to the bank that you’re an actual business owner.
In other words, registering a business is critical for a wide range of your operations. Therefore, not handling it at the very beginning is a clear indicator that you’re not thinking about your company’s future.
You haven’t separated personal and business bank accounts
To reduce the cost of bank fees and save their time, many business owners decide to use their personal bank accounts for their business’ purposes. However, this is not a good option for a few reasons.
First, when your business transactions are done via your personal account, the International Revenue Service won’t be able to treat you as an actual company. This may cause a plethora of additional problems for your business operations and funding.
Second, it doesn’t look professional. Your customers want to know they’re working with a reliable, legitimate company and making transactions using personal credit cards proves the opposite.
Finally, having a separate business bank account is critical for your taxes. It would be extremely difficult for you to separate your private and business cash flow using a single account.
You haven’t secured your funds
If you managed to launch your business without taking out a bank loan, crowdfunding, or any other source of financing, that’s great. Unfortunately, no matter how great it is, bootstrapping is not enough to grow your business effectively. You need to create realistic financial projections, consider the costs of your business’ expansion and understand how these rising expenses will impact your operations. Most importantly, you need to secure the right financing methods to back you up.
You could partner up with another aspiring entrepreneur with similar interests, apply for a government grant, take out the abovementioned bank loan, find an investor, or leverage invoice factoring. And, if you want to maintain the self-sustaining nature of your business and support it from your personal funds, but you’re already in substantial private debt, you could consider debt refinancing. For example, you could consolidate your existing debt to personal loans tailored to your needs.
No one talks about you
If your customers aren’t talking about you, this probably means that you haven’t invested enough in your marketing efforts. With the ever-rising number of your competitors, just having a great product or business idea is not enough to succeed. You need to have a detailed branding and marketing strategy to boost people’s awareness of your business.
And, digital marketing lets you promote your business on a shoestring budget. Investing in the UX web design, search engine optimization, social media marketing, and blogging are just some of the numerous strategies that will make your business findable and help you build stronger relationships with your target audience.
If you’re not sure how to tailor your marketing efforts to your target audience, you should consider outsourcing them to an agency or hire in-house marketing teams. Even though this is a huge investment for your small business, it helps exploit your brand’s full potential, boost customer engagement, and build a solid online identity in the long-run.
Your employees are leaving you
If your employee turnover rates are growing, this means that you’re not treating them as you should. This is actually one of the major problems businesses face. Gallup emphasizes that 73% of your disengaged employees will look for new business opportunities.
To prevent your employees from slipping away, you need to keep them happy. Go the extra mile in creating a dynamic and pleasant workplace atmosphere, organize different team building activities, and prove you value their hard work by incentivizing them regularly. Most importantly, show you trust them and offer continuous career advancement opportunities. New responsibilities and challenges will clearly tell your staff members that you have planned something big for them.
Over to you
When launching a business, you need to take it seriously from #1 day. If you don’t brand yourself properly, make your employees happy, invest in building strong customer relationships, and securing a reliable financing method on time, you won’t be able to survive in today’s highly competitive market.
How much have your perceptions of doing business changed over time? What are the major challenges you faced? Let us know in the comments!
