Causes of Business Failures that are Often Ignored by Entrepreneurs

IDNBC.COM - Failure in business is the biggest risk when the business is not handled properly. Some small companies such as startups are more vulnerable to failure. Business failures can be caused by many things starting from handling wrong work problems, improper financial management and so on.

Companies should be able to prevent the risk of bankruptcy by taking various preventive measures, but sometimes the risk of bankruptcy will still exist. Here are some of the causes of business failures that entrepreneurs must watch out for:

1. Lack of planning causes business failure

Lack of planning for business from the beginning is a factor causing business failure. Business plan that has been made is not in accordance with the reality of the work. Business plans may be more complicated so they are difficult to realize. 

The plans and strategies used may not be realistic so it is very difficult to implement in running a business.

2. Poor business management causes business failure

Poor business management will have an impact on business continuity. The wrong marketing and sales strategies that are not in accordance with sales targets will make business sales not increase. Then the most often cause of failure is the wrong financial management. 

Inaccurate and careless fund expenditures, spending money on unnecessary things, not being able to reduce expenses with a small income will make a business likely to fail. In addition, giving work to the wrong person will make the business not run properly. 

For this reason, it is important to consult experts on good business management, so that the risk of business failure can be prevented.

3. Not innovating makes business failures

Businesses that are already running well should still be controlled. Innovation is an action that must be taken by entrepreneurs in order to make their business more stable. Times are increasingly developing as well as trends in society. 

Innovation aims to provide convenience to consumers, so consumers can continue to be loyal to use your company's products or services. Business is about development, so you must be able to develop to be able to follow market trends or more precisely is customer trends.

4. Lack of service to customers can cause business failure 

For an entrepreneur, service to consumers is an important thing that must be maintained. Customers who are satisfied with the product or service are the main goals of the business, but good customer service will add value. 

However, for entrepreneurs who cannot meet customer service or even fail to understand customer intentions, they can threaten a business that is already running. 

Consumer reviews that are not responded to properly will allow customers to turn away from our products or services. Lack of response given to customers will certainly make it difficult for businesses to grow to cause business failure.

5. The absence of improvements to the wrong system is the cause of business failure
Problems in a business such as problems in the work system, marketing or other problems must be solved as soon as possible to prevent problems from becoming more complicated. 

Small problems that occur in the company such as the employment of workers who do not fit their fields may pose risks in the future, so it is necessary to find people who are more skilled in the work to reduce the risk of business failure.