You might have heard many people in your circle talk about starting their own business. People think about starting their own business for different reasons. Some want to be their own boss while others want to earn big bucks instead of taking a salary. However starting a business is a tricky task and maintaining it is an entirely different ballgame. This is why many people succeed in starting their business but fail in maintaining it. So what causes this failure? Well, here is a list of reasons that causes businesses to fail in the first 3 years of starting their operations.

They Don’t Have A Business Plan

When you are starting a business you should have a detailed plan of what you are going to do and what your goals are, without a plan the business is bound to fail. Your business plan should contain future plans for your business in order to achieve success.

They Are Not Aware Of the Market Dynamics

Sometimes business owners don’t research about what the market dynamics are for their specific business for example who are the other competitors, they don’t know about the demand for their respective product or they haven’t set the pricing right for their products.

They Don’t Have Contingency Plan

Contingency plan is needed in case something doesn’t go as you have planned for your business or you can say that a bad event occurred, so you need a backup plan in that case. If you don’t make a backup plan, it will only take one disruptive event to fail your business.

Financing Problems

One of the major reasons in failing your business is finance problems. You should always keep track of your business’s running cost and make sure you have enough money to keep on running your business even when you are not making profit.

Not Being Innovative Enough   

One reason for the failure of your business could be that there are already similar products available and your product is not innovative enough. Study the market for your product carefully and make sure that you product is unique and up to customers standards.

Expanding Faster Than They Should

When you know the demand of your product is stable and you have enough resources to fulfill your demand, then expanding your business is a wrong move. Expanding your business faster than increase in demand of product will lead to waste of product, time and money and ultimately it will lead to business failure.

Competitors

Before entering in the market for business you should study your competitors in depth. You should look in to what are the product similarities, what’s their pricing strategy, what’s the quality of product and how are they marketing their product. If you don’t study your competitors in detail your business will eventually fail.

Failing To Respond To Customer Survey

These are some of the major reasons that businesses fail in the first 3 years. If you are someone who is looking to start a business then you should definitely pay close attention to all the reasons mentioned above. Being aware of these reasons can help in making your business successful.