Author: Gerard Ferreira
In the last article in the series on bouncing back from a busted business, ❤️🩹 we discussed some of the necessary steps to take immediately following the business failure of a business. One of the most important of those was understanding the reasons the business failed. This rounds, we’ll look at some areas for review when analyzing your business’ failure.
There are many factors that go into business operation, but in the interest of time, we’ll stick to the most common areas and take a look at some straight questions to ask yourself.
Strategy – Did you have a comprehensive business strategy that included SMART goals 🧠 (Google it)? Did you stick to this strategy or was it thrown out/deviated from when the business got going and you were bogged down by the day-to-day?
Customers – This doesn’t just refer to understanding your customers but to knowing them. What information about their lives would be valuable for you to know, what makes them tick, what are their likes/dislikes?
This can also apply to being too reliant on one customer or a small, too specific group of customers that weren’t buying enough to sustain the business.
Marketing/Communication – Beyond understanding your customers, what was your marketing and communication plan? Did you speak to your customers in a way that they would respond positively and in channels they regularly used? Also, did you promote your business often enough that customers knew who you were, remembered you when they thought about your industry and wanted to buy from you? 🪧
Industry/Market & Product – Similar to understanding your customers, did you understand the market in which you operated – the ins and outs, nuances and influential factors? Was there anything important you may have missed that lead to your business failure? Was the industry itself profitable when you entered or did you join a trendy sensation on its way out?
Regarding your product or service, did it serve the industry sufficiently? Look at aspects like pricing, suite of offerings, customer service, whether the equipment being used was up to scratch and whether the overall product quality was at or surpassing industry average. Another term you should Google is USP – unique selling property/point/proposition. Did your product have one or was it part of the crowd?
Financing/Accounting – Often, businesses fail to consider the totality of financing required to get things up and running, like overheads, salaries and raw materials. If these are overlooked, the accounting may suffer. 🧾 This refers to practices such as keeping track of your bills and expenses, creating and referencing monthly budgets and keeping your business and personal finances separate.
For more ideas on what to review, check out “Ten Common Causes of Business Failure.”
Allow yourself to take this introspective time and to take good notes as you analyse what may have caused the failure of your business venture. The key here is that the failure could end up being a really useful lesson. So don’t waste it. Analysing why and how your business failed, could teach you a lot that would be of incredible value no matter what you do next.
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