A COMPREHENSIVE & PRACTICAL GUIDE ON HOW TO START CASSAVA FARMING & PROCESSING BUSINESS By: Micheal B. O. SOME REASONS WHY STARTUP BUSINESS FAILS
Statistics show that 90 % of all startups fail. Further, 82 % of startups are self-funded, while friends and family help 24 % of entrepreneurs stay in business. Most business experts agree that the following reasons for failure are consistently in the top five.
MARKET RESEARCH According to data gleaned by CB Insights from 101 essays written by failed entrepreneurs, failure to conduct sufficient market research is number one on the list of why startups fail. 42 % cited it as the primary cause of their startup’ s demise. Specifically, in these cases, sufficient market research would have revealed the lack of a market need for the product. Rising prices, coupled with falling wages has reduced the ability of commercial advertising to convince people to buy things they really don’ t need. It has also resulted in a shift away from commercial television and towards social media.
RAPID EXPANSION The number two reason for failure is running out of cash. This is usually the result of rapid expansion. A common term used to describe this phenomenon is“ premature scaling”. Most entrepreneurs attempt to grow their businesses before establishing a firm foundation, and more importantly, a regular income with which to do so. Problems commonly associated with rapid expansion include difficulties with employees, customer dissatisfaction, and diminishing profits. Growing a business too quickly usually means that existing employees have to work overtime, as well as help train new employees. Often, it also means a reduction in the quality of the product, the customer service, or both. Any decrease in customer satisfaction, for a new business, is difficult, and costly, to reverse. Most often, the business doesn’ t last long enough to succeed in doing so.
PARTNERSHIPS AND TEAMS Steve Hogan, a business expert whose business, Tech-Rx, helps people turn their failing businesses around, says that companies founded by more than one person are more likely to succeed. While the media creates and celebrates rags to riches success stories like that of Steve Jobs, presenting them as lone visionaries and mavericks, the truth is that without Steve Wozniak, whom the majority of Americans have never heard of, they may have never heard of Steve Jobs, either. While the image of the lone wolf is romantic, our human interconnectedness is real and nobody ever succeeds without help from someone, somewhere, sometime, usually many someones. Having a co-founder means having a valuable second opinion and different perspective on every major decision. It also means doubling your financial, mental, and emotional resources.
COMPETITION Having done sufficient market research prevents many entrepreneurs from attempting to enter the market with a product for which there isn’ t sufficient demand. If your market research reveals that there is a high demand, it will also likely reveal what others are doing to meet that
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