"Failure in business is indeed a frightening prospect, but who would have thought that this failure could be used as a lesson for them so they can get back up and be enthusiastic about achieving success? Check it out here!"
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Failure in running a business can not only be experienced by novice business people, even business people who have spent years of their lives involved in the business world are not immune from the shadow of failure. Everyone who decides to be involved in the business world certainly does not want to taste the bitterness of failure. Winning requires special effort and strategy to be able to develop your business optimally and ensure that your business does not fail.
Even though they fail in business, quite a few people get up and are enthusiastic about starting again. Mentality, commitment, and great enthusiasm are needed before getting involved in the business world. Apart from that, before starting a business, it's a good idea to be aware of various things that are predicted to cause the business to fail along the way, as listed below.
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1. Unconsistent Planning
No matter how much capital you have, if the planning is not prepared carefully, shortly the business you started may be forced to close down. Before deciding to do business, identify your reasons for building a business. Do you want to make more money to get rich quickly?
It is very human if you aspire to make as much profit as possible to get rich quickly in business, but becoming rich cannot be achieved in a short time. So it is said that a business that feels the sweetness of success must go through a long and not short process, including not giving up easily when facing obstacles and always working hard.
Apart from concrete reasons, find out whether you have a great passion for the business you will be involved in. Because doing the same thing over and over again makes most people bored. If you are someone who gets bored easily, think again before deciding to do business.
Another thing you must do before making a business plan is to survey and ensure that the products you offer are in line with market needs. In this way, you are mentally prepared to face failure so that you are willing to get up, learn from your mistakes, and try to build your business again if you encounter obstacles.
Nothing is perfect in this world, including your business planning, at least the plan you make must be precise and well thought out. The planning you make is the foundation for determining how your business can run as expected and achieve targets (success).
Apart from that, planning is also useful as a means of controlling all ongoing activities. That way, you can determine and carry out what activities you need or don't need to do. If it runs regularly according to the predetermined planning stages, this will have a good impact on the business you run.
A business plan itself is the goals of a business which are made in writing, complete with how to achieve these goals. In other words, a business plan includes the vision (goal), how to achieve the goal, who is involved, and the target time required for the business you are starting to achieve success.
Because, starting a business is not just about producing goods or services, but you also have to know what society needs, how many goods or services are needed, and so on. You don't have to be an expert in the business field you are starting, but at least you have a strong foundation and interest. Business is not just a matter of trial and error, when you decide to do business, you must be prepared to face many challenges that can drain your energy and mind.
For small or large scale, other simple guidelines that can be used as a basis for making a business plan include the type of business, location, amount of capital, profit and loss picture, strategy, and evaluations that are carried out periodically.
The profit and loss picture is a guideline for running a business, you must be able to determine how much profit per month, how much sales target, and estimated operational costs. To achieve the desired profit, balance it with a good business strategy.
Just like the picture (projection) of profit and loss, regular evaluation cannot be underestimated, when the business you started is already running, evaluation is very necessary. Evaluation aims to see whether everything goes according to the business plan you made or not. Does the business time match the profits generated, from there you can fix things that are not by the business plan. Evaluations can be carried out periodically, for example, every three or six months.
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2. Location
Location (place) is an important factor that cannot be taken lightly. For business success, you certainly have to find a suitable place for the business you are running. Don't be lazy about conducting surveys in various locations (places) every day for several months. An important factor in determining the right and strategic business location is to apply these tips. First, choose a business location that is easy to see and reach. Occupying an area that is easily seen by many people is profitable. This makes it easier for you to carry out promotions so that the costs you have to spend on promotions can be cut and used for other needs.
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3. Bad Management
Another common mistake that you must be aware of when running a business is management. Believe it or not, many surveys state that bad management is the main cause of business failure. New business people usually lack experience in business management. Therefore, novice business people must be smart in reading the situation when doing business.
What is meant by business management is a series of processes including planning, direction, and control to achieve business goals. The basics of business management must be well understood by people involved in the business. Every business has its risks, which is why the targets the owner wants to achieve are different. To be able to achieve targets, good and mature business management is required.
The first basis of business management is human resources. Not just quantity, but also quality. No less important is production management, both in the form of goods and services for market (consumer) satisfaction. Generally, production management is planned, managed, and controlled based on the consumer's point of view. That's why there needs to be a survey regarding what goods or services are needed by the current market to create attraction.
The business you run must also have well-managed financial management. This financial management is related to the process of incoming and outgoing production money. If not managed well, expenses can be higher than income so that inflation cannot be avoided, over time the business will shrink and eventually go bankrupt. Business success is not only determined by the amount of capital but also by the basics of good business management to create efficient business activities.
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4. Let your guard down against the competition
Sometimes, novice businesspeople don't take into account the competition around them. Any business will always have competition. Even though the business you are building is new and even unique, different from most businesses, never be careless about any potential competitors that will emerge. There's no harm in studying your competitors' strengths and weaknesses, from there you can create a much better marketing strategy. For people who like competing, competitors are an advantage in themselves.
Why is that? They consider that business is a fun competition that can bring profits with creativity and high competitiveness. Use competitors as motivation to continuously innovate. Whatever business you run is like pedaling a bicycle, so that the bicycle can continue to run and not fall off you of course have to keep pedaling.
Continue to think creatively to generate fresh ideas in product and service innovation. Focus on the end goal, not focus on beating competitors. In short, continue to develop new products, and continue to innovate because competitors can succeed in matching or even surpassing the business you are in.
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5. Doing Business with the Wrong People
Next, the factor that causes the collapse of the business you are in is entering into a business collaboration with the wrong person. Before deciding to start a business with other people, including family, friends, or even your partner, look further into the vision and mission.
Make sure that those you work with are individuals who at least have the same goals, achieving success and increasing income. At least understand what business risks you will be involved in. Because business is not just trial and error that relies solely on luck. It takes intention, commitment, hard work, and innovation so that targets and financial results can be achieved in the future.
Don't easily trust other people, especially if potential partners do not have the skills that are needed in the business you are starting. This can backfire later on. However, that doesn't mean you have to be afraid of collaborating with other people. It would be better not to waste energy and time collaborating with people who do not match your personality, vision, and mission.
According to Jack Canfield, author of the best-selling book entitled The Success Principles, there are two criteria that you must set when you want to collaborate with other people. First, you have to be sure that you like and trust the person. Second, the people you work with must be able to provide something different.
On the other hand, Tai Lopez, an investor, said that it takes at least one year to get to know your business partner. According to Lopez, just like dating, people will show their true colors after a year of knowing each other. Don't be too quick to decide to collaborate. Make sure that each party who will be involved understands their responsibilities. Otherwise, you will be in a situation where all responsibility will be shouldered by yourself.
Not much different from Canfield and Lopez, Chris Plow, an entrepreneur advisor, explained that the collaboration that is established must have a relationship basis so that it is sustainable, long long-term. To be able to understand each other, give time to share so that trust in each other grows. This is important for each party to have if one day they face obstacles. When sharing, don't hesitate to express what your hopes are from potential partners. In this way, healthy cooperation will be created, mutually beneficial to each other, and long-lasting.
Whatever type of business you choose, it will be much easier to run if you and the parties you collaborate with have expertise in that field. Even though you don't have professional skills, at least you understand the ins and outs of the business you are going to be involved in. Armed with careful planning and calculations, specific experience, and of course a strong commitment, the business you are involved in will certainly not be difficult to carry out.
You won't possibly taste the sweetness of success if you still do the things above. Even though you have tried your best not to do the things above, this does not mean that the business you are running will not experience obstacles. When faced with problems, don't give up easily, let alone despair. As the saying goes, failure is delayed success. When you experience failure, armed with the experience (failure) you have, use it as motivation and evaluation material.
There are quite a few entrepreneurs who have had their ups and downs with various obstacles and don't give up easily, such as Milton Hershey, a name that is certainly familiar to chocolate lovers. Yes, Hershey's is a worldwide chocolate brand. Hershey once tasted the bitterness of failure, even three times before finally being as successful as it is today. To build the chocolate business empire, Hershey had to overcome many obstacles, including being fired from his job and working hard to create his own (chocolate) business.
Hershey does have a great passion for sweet snacks, such as candy and chocolate. However, his passion had to be faced with various obstacles. Three times Hershey tried to build its sweets business, but three times it also failed. Instead of giving up or giving up, Hershey continues to innovate by producing milk chocolate in greater quantities. Who would have thought that his efforts were not in vain, his milk chocolate sells well on the market to this day.
This Hershey story proves that the hard work you put in while doing business will not betray the final results. Failure is not the end of everything, but rather another step towards success. Achieving success in anything, including business, requires sacrifice. Because nothing is instant in this life. It is not surprising that to taste the sweetness of success, you must be able to overcome various obstacles and even fall into failure first.
