As a business consultant, I often come across small, medium and large scale business ventures that close down because their owners could no longer continue running the business. Many at times, this closure boils down to the fact that the business could not generate enough to sustain it’s existence.
This is why success is not about starting a business idea only but also involves managing it profitably. Many investors rush into business without understanding the nature of the investment. Most businesses require a certain level of experience, time and finance before you start getting decent returns on your investment.
I have tried my best to compile common reasons why you may not make enough money from your business.
1. Wrong Business And Timing: Because a business idea looks good does not make it right for you. You need to ask yourself if you have what it takes in terms of expertise, experience, network, finance, human and capital resources to run the business successfully.
2. Finance And Experience: Some business are so technical that without the required knowledge you may not earn much from it. For instance, in some businesses experience people know when and how to cut down the cost of production without directly hampering production. In the same vein, some businesses require you to prepare for great amount of capital and funding until they start delivering.
3. Customer Care: You make profit in a business when your customers/clients purchase your good or service. As such, it is important to always treat your customers right. Timely appreciation and incentives are ways to draw your customers closer. Apart from losing the juice from referrals, market size for your products or services will shrink if you or your staff put on an unfriendly or hostile attitude towards clients.
4. Spending Priority: Spending more than what you earn in a small business spells doom. You do not have to buy everything you want in the business. Separate your needs from your wants. Improvise in areas where this is convenient. Instead of spending on irrelevancy, spend more on items or processes that will increase production and sales.
5. Marketing: Effective marketing is the soul of any business. If you don’t like spending on advertisement, you may be the one killing your business. Cost of running adverts in the online and offline print and media should be incorporated in your budget. The more exposure you generate for your business, the higher the chances that your products would sell well.
6. Unique Selling Point (USP): Creativity is not restricted to thinking up a completely new business idea, re-branding existing ones is also commendable. For you to run a successful business, there is need to provide reasons why customers should prefer your product over others. As long as your business solves people’s problems, you will always make money.
I hope I have been able to open your eyes to whatever you are doing wrong. I’m confident that by the time you finish making changes, the story will change as money will start flowing in above your expectation.