There are many factors that contribute to the success and failure of starting a business. If a business owner does only the slightest thing wrong, the business will fail; fast and possibly even bankrupt him/her; although, when a business owner gets everything right, a business can lead to great success and lots of money. Some of these factors include, setting goals for the business, making a business plan, and being realistic when making goals; on the other hand some factors that contribute to the failure of starting a business are starting a business for the wrong reasons, poor business management, and insufficient funds.
One factor to consider when starting a business is setting goals for the business. With goals in mind, businesses are easier to manage because an employer knows what he/she wants to do (Bizcovering.com). Because it's wanted, an employer will strive to get the success he is looking for. Also because the expectations are known, an employer can work for it and let nothing get in his/her way (Isidro). Business owners should be persistent when trying to reach their goals. If a business owner is lazy and doesn't strive for his/her goals, odds are they will never be reached. After the goals are met the business owner should set higher expectations and keep expanding his/her business and one day it might get big enough to be considered a big corporate business. If no higher expectations are made, the business will never expand and will always be a small business and will barely bring a profit for the business owner. Therefore, higher expectations are created so a business can expand. That is how setting goals for a business can lead to the succession of the business.
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Another factor that leads to a successful business is making a business plan. With a good business plan a person knows what needs to get done and how to do it (Bizcovering.com). A business plan keeps a business owner neat and organized and he will work more efficiently with a good business plan. Also a business plan outlines a whole business and helps it to succeed. A business owner always knows what needs to be done and just how to do it. Finally it tells a business owner the concept, mission, and drive for the business (Kickstart Alliance). This way the owner has a clear idea of why they are doing these things and it helps to inspire him/her to succeed. Basically with a good business plan it's harder to make a business fail than to make it succeed due to the fact that everything is basically outlined, you just have to put the plan into action. That is how making a business plan can really strengthen the odds of a business succeeding.
Finally one last factor that contributes to the success of starting a business is being realistic when setting goals for starting a business (Bizcovering.com). If a business owner is unrealistic he/she will lose a lot of money and the business will surely fail. For example if a business owner is expecting too much, then he/she will be let down and possibly lose the drive to succeed. Also, when starting, a business owner needs to focus on the people's wants and needs instead of his or her own. The customers make a business's money that it needs and if they're not satisfied, then why would they come to the business when they can go elsewhere. Finally, being realistic keeps a business orderly and organized. Instead of spending time thinking about things a business owner will probably never get, he/she spends more time helping customers and making money (Normand). Towards the beginning, a business might drain a business owner's money and most likely start off slow, but with the proper time and patience, it will surely come around and bring in plenty of money so a business owner has to be patient and never lose the hope or drive to succeed. That is how being realistic when setting goals can help the chances of a business succeeding.
Along with factors to succeed, sadly, there are many factors that contribute to the failure of a business such as starting a business for the wrong reasons (Bruder). If, when a business is started, the owner is greedy, then he/she will probably over-price the product and not get many customers because they can find it for cheaper elsewhere. Also if the business represents say, food, and it's surrounded by restaurants, odds are it won't get much business so you need to offer the customers something new. If there are many choices then people can go to other places but if the business a person is trying to start is the only one around, they have to come to it. Finally, one last wrong reason to start a business is doing it just to be the boss of oneself. The business owner has to realize that the customers and the people around them become his/her boss because they know what's wrong with what the business owner is doing and they need to listen to them to make proper improvements (allbusiness.com). a business owner has to do everything in his power to keep the customers satisfied because they are the most important part of a business.. That is how starting a business for the wrong reasons can drastically affect the chances of your business succeeding and failing.
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Another factor that causes the failure of a business is improper business management (Normand). The owner needs to pick a management team who are good leaders and can lead the business to success. The owner definitely doesn't want someone who is lazy managing his/her business and not doing anything while he/she is paying him good money. That is just a waste of money when it could be going toward improvements or a respectable management team who can get the job done. Also they need to manage their time, money, and customers wisely because there is little room for error. The owner's time will be spent improving the business, also the customers don't want to be kept waiting, and they're the ones making the money for a business so the owner needs to pay attention to them as well, and he/she definitely doesn't want to overspend his/her money because he/she will quickly run out. Finally, a business owner should only hire people he/she completely trusts to handle funding and things that involve money. The owner doesn't want some stranger stealing money from them and causing the business to go bankrupt (Schaefer). It's never good to have someone stealing money from a business; it's critical in the beginning because there is almost no money in the first place and a business owner won't be able to afford his/her business if someone is stealing their money. That is how improper business management can drag a business down and cause it to fail.
More than 85% of small businesses fail due to insufficient funding. Without proper funding a business owner won't be able to afford the business and it will drain his/her money fast. Businesses are really expensive and without the money, how can he/she keep it? A business owner has many expenses and definitely need proper funding to be able to afford it all, especially in the beginning when the business is most likely not bringing in much money anyways. Without proper funding most small businesses fail within the first 5 years. The business will slowly eat at the funds and money in the owner's pocket and without customers making the money to replace the funds lost, the business will fail fast (Kickstart Alliance). Finally, there are many sacrifices needed to fund a business, but once it gets going, the money will be coming in fast. Once the business has customers and the owner is doing everything right, then the money will start slowly building up, this is when the owner wants to start spending and improving his/her business (Schaefer). You don't want to spend all of your money on improvements in the first year or so when you don't have the money to spend in the first place. That is how improper funding can bankrupt a business and cause it to fail fast.
In conclusion, there are many factors that contribute to the success and failure of a small business such as setting goals for the business, making a business plan, being realistic when making goals for the business, starting a business for the wrong reasons, poor business management, and insufficient funds. If all of these things are done correctly or avoided, then a new business could succeed and possibly rise to the top. There is never a guarantee that a business will succeed and with that in mind a small business owner should always be cautious and may have to make slight changes but with this general pattern, any business could succeed.