There are many entrepreneurs, but not a few of them have experienced entrepreneurial failure. Why do these entrepreneurs fail?To sum up, there are several reasons.
1. Lack of funds.
Entrepreneurs underestimate financial needs, lack financial budget, and cannot use funds in operation or production, so it is difficult to create surplus.
Many people did not consider the importance of working capital at the beginning of their business, so they started their business without enough working capital.However, many people have to close their doors in advance because they do not have enough working capital when their business is not very smooth and they need to stick to it for a period of time.If entrepreneurs do not have enough working capital to maintain the operation for more than half a year, it is good not to start a business easily.
2. Insufficient market information.
This includes not really understanding the demand of the potential market, incorrectly estimating the share, and not clearly understanding the sales channels and competitors.
Many entrepreneurs do not understand the operation of their competitors, nor do they carefully analyze their competitors' business strategies, nor do they know what measures and means their competitors will take to deal with themselves in the next step.In particular, if we do not analyze the advantages and disadvantages of both sides and act on our own feelings, we often suffer in the end.
3. Too many defective products or too high defective rate.
Because there are too many defective products, or the defective rate is too high, the costs and losses are too large, and the products at the beginning of entrepreneurship are also lack of popularity, which leads to unsalable products, resulting in a large amount of inventory.
4. Wrong policy.
Inappropriate enterprise values, ineffective management and sales strategies, wrong estimation of competitors, etc., including errors in entrepreneurial ideas and competitive strategies. Since these strategies are related to the survival of an enterprise, they are also important reasons for failure.Once entrepreneurs make major mistakes or incidents, they often lack experience and solutions.Therefore, for first-time entrepreneurs, a wrong strategy may be fatal.
5. The product elimination rate is too fast.
If the life cycle of the product is too short, or the product produced is not in line with the trend, the product will be eliminated soon after it is launched. Such products that are not in line with the trend and are easy to be eliminated will be likely to fail in the short term after entrepreneurship.
Generally, popular products for young people have a very short life span. Entrepreneurs must find out this rule. When a popular product is popular, you should be careful when you choose it wisely and want a piece of the cake. Maybe when your new product is launched, it is also the time when the product is no longer popular.
6. Improper management.
Entrepreneurs have insufficient management experience, make changes day after day, and often learn from mistakes, but they have consumed many resources of the company and are unable to establish a reasonable, flexible and efficient system.For example, improper employment causes unnecessary internal friction;For example, there are loopholes in the financial system, giving employees the opportunity to harm the public and enrich their own interests;For example, they do not attach importance to safety production, resulting in major casualties.
7. Start a business at the wrong time.
For example, if you open an air conditioner store in winter, your entrepreneurial career may suffer setbacks due to the off-season factors.Or entrepreneurship was soon restricted by the newly issued local industry management regulations, which could not be expected, resulting in waste of resources or inability to operate.
The above are some common reasons for entrepreneurial failure. If you are an ordinary entrepreneur, it is good to avoid these problems in your own entrepreneurial process to help you achieve better success.
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