In the early days, your new business idea is exciting. It’s fresh. It’s invigorating. You can’t wait to get it off the ground.
Once you get running, though, things don’t quite click the way you hoped. You’re a young business owner, at 35, but you’re already worried about bankruptcy. Is your start-up falling apart?
Below are six big reasons why businesses wind up not hitting their projections or being as successful as they looked like they’d be at the beginning. Consider them carefully.
1. Everyone else is doing it.
Chasing trends can be problematic. If there is too much competition, can you really stand out? Everyone else has months or even years on you. You’re already behind and consumers have a ton of choices.
2. The market is saturated.
Consumers just don’t need your product. For instance, maybe you are trying to sell backup cameras for cars. These are a great development in terms of functionality and safety, but they’re common equipment on most new cars. A great product won’t sell if no one wants it.
3. The idea isn’t good.
This is hard to admit. You were so excited about it. Unfortunately, most young business owners think they have brilliant ideas that are going to reshape the world. Some just don’t live up to it.
4. You’re facing a lot of barriers.
You have a good product and a good idea, but barriers crop up all of the time. For instance, maybe your product would be most useful for the military, but you don’t have any military contacts. Even if you did, the military hasn’t approved spending for that product. Your contacts may love it, but they’re not buying it without approval.
5. Your tech is already outdated.
Technology moves quickly. It can take years to get a business off the ground. The business world is incredibly full of competition. If your technology is behind when you open your doors, you’ll need to catch up quickly.
6. Your business plan isn’t as easy to implement as you thought.
Maybe the end product is great, but the supply chain is nearly impossible to set up. Maybe it’s hard to reach consumers. Perhaps it’s all just too big; your product or service is only really good if you’re in all major U.S. cities, for instance, but you don’t have the capital to make that happen and you don’t have a plan to start small and scale up.
Naturally, every company is different, but these are some of the main reasons that new businesses quickly burn out. As you can see, even having a great product doesn’t mean bankruptcy isn’t a threat. It’s critical to understand the process and plan in advance for potential setbacks.