Failure makes us stronger in face of adversity. And the sooner people realize this, the better off they will be in the world of modern business. If you fail to embrace each experience as an opportunity to learn something new, you are pre-determined to fail in your endeavors. However, if you take everything the world throws at you and turn it to your advantage, you have the chance to create something great. After all, this is how the world works, and how moving companies develop from local businesses to global van lines. So, to help all those open-minded moving entrepreneurs, today we touch on the common reasons why small businesses fail in the first year.
First, let’s take a look at some of the stats
According to the most recent Small Business Administration (SBA) studies, the percentage of small businesses that fail in the first year of their work goes as far as 30%. And this percentage progressively grows as the years go by, reaching up to as much as 65% of companies that shut down in the first 10 years. But let’s not get ahead of ourselves. For starters, we want to see what it takes to start a small business and keep it in the game for over one year.
When you take a step back and look at it all closely – it doesn’t really inspire success, now does it? However, you have to consider the simple fact that the tables can always turn. All you have to do is look to avoid all those popular reasons why small businesses fail in the first year. Once you do that, keeping afloat will be all the easier.
But you can’t avoid something unless you know what it is that you are trying to avoid in the first place, right? Hence, here are the top mistakes that small business owners are likely to make in their first year:
Reason #1: You start your business for the wrong reasons
Motivation is a strong factor in any given situation, especially one related to running a business. So, you have to stop for a minute and consider what your reasons for starting your moving business are. Are you in it just for the profit? Do you have experience in the industry and want a name and truck to call your own? Are you looking to escape from having a boss? All these points are valid, but they don’t really inspire awe nor do they pump you with motivation to succeed.
Instead, you need to reach deep inside and consider some of the following examples of why you should start your own business story:
- To create a family-owned legacy for the generations to come.
- Small businesses fail in the first year when you lack the passion for the work you do.
- A firm belief in the team you have and the quality of service you can offer people.
- Complete dedication and determination to succeed and create a recognizable brand.
- The willpower not to surrender when faced with overwhelming odds and struggles.
- Strong leadership skills with the ability to think outside the box and under pressure.
- A positive and extrovert attitude, with a love for interactions with others.
- The introduction of a unique and game-changing idea, with a desire to see it through.
Reason #2: Most small businesses fail in the first year due to now following trends and demand
Let’s say that you’ve always wanted to start and develop your moving and storage company. And now, after years of saving, you can finally do it. However, your ambition leads you to start a moving business in a market that is overly competitive. And when there are dozens of moving companies within ten square miles of your home, it can be hard for a small and new one to achieve any success.
This is why it is so important for you to do your homework on the local market and the current situation. Otherwise, you risk jumping into an investment that will fail faster than it began. Examine moving industry trends and see how your idea fits into it all.
Reason #3: An unrealistic business plan
Pride and arrogance can be good…in limited measures. But one of the most common reasons why small businesses fail in the first year is the lack of a proper business plan. You have to outline realistic goals for your business right from the start. As your company develops and grows, so to will those goals become higher and more ambitious.
However, in order to do this, you need to conduct research, monitor the market, calculate expenses and investments etc. All in all, you have to adapt as you go along and make logical calls that will keep your business on track.
Reason #4: A lack of financial support
Not everyone has the starting capital necessary for the launch of a company. So, what happens when you take out loans for a business, only to have it sink in the first year? Instead, you have to invest smart right from the start and always leave a contingency plan. Because the more you stretch your finances in the beginning, the slower your business will progress, and the more it will take you to become profitable.
Reason #5: Negligence of digital marketing and social media presence
Location is the line between company success and bankruptcy nowadays. Be it real-time or internet location, you have to make sure that people are able to find your business. This is why SEO for moving companies is such a gold rush. Everyone wants a piece of the cake and to have their company pop up on those first pages of search results.
Just as important is the social media presence a company has in that first year. Social media platform are all about the “new and fresh”, hence starting a business has to be marked right from the start. Small businesses fail in the first year because they neglect to build up their brand online. Everyone is online today, and they use this market to secure services and products that you might just be offering. The virtual availability and visibility of your business are crucial.
Reason #6: Unplanned and quick expansion of business
Once your company is up & running, the time to expand slowly comes. However, most people tend to make that error and not treat an expansion just like the start of the business.
- Physical growth of the company needs to be followed with the right research into new areas and markets.
- Expanding the scope of your business means that you have to understand what it that you are attempting to incorporate into your current range of services. Small businesses fail when they become too greedy and bite more than they can chew.
Hopefully, by being aware of all this, you will be more prepared for the challenges to come. Hey, it’s all about minimizing that fail rate as much as possible at the end of the day.