When you start your new business, you don't expect about one thing and that is the failure. But the truth is several startups do not succeed in the long run. An article published in Forbes.com says that according to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months.

Even a survey by Designhill revealed that an estimated 530,000 new businesses breathe to life each and every month. Why does a business fail? There're many reasons. But it always fails because of the entrepreneurs who are unaware of their mistakes. We've seen many people who fail at starting their own first business - some of the business tycoon, from Bill Gates to Steve Jobs, failed in their first businesses before emerging into the outstanding successes they did become.

Wondering why your first business is likely to fail? Let’s discuss 7 reasons for businesses failure and what you can do to avoid business failure.

1. Lack Of Planning

Business always fails because of the poor planning – success can't be achieved without hard work and strategic planning. You can not earn success if you are lacking to short-term and long-term planning in your business. Your business plan should include measurable goals and also include where your business will be in the next few years. Remember the lack of planning will destroy your business. So you need to make a realistic business plan, which is based on accurate and educated projections for the future. Some of the elements which should include in business plan:

• Market analysis
• Potential problems and solutions
• Workforce needs
• Budgeting and managing company growth
• Analysis of competition

2. You Don't Have Adequate Contacts

It's a fact that you won’t have a long list of the network when you start your first business. But it's highly important to create your professional network that plays a major role in the ultimate success of your business. Your contacts will help you in getting potential clients, partnerships, and employees for your business, be it a herpes treatment business, food production or garment manufacturing. And without a strong network, you’ll miss out these benefits. 

3. Not In Touch With Customers' Needs

Your business fails if you don't stay in touch with your customers or you neglect to understand their requirements. Keep a fact in your mind that your customers would love your product/service if you changed this feature as per the feedback they offer to you.

In order to avoid losing touch with customers, you need to keep an eye on the trending values and interests of your existing and potential customers. So, survey your client base and find out what their interests are; are they even still interested in what you’re selling; how loyal are they (potential customers) to their current supplier and keep abreast of changes using customer relationship management tools. This will help to succeed your business across the Globe. For example, if you are planning to rent your apartment for earning some residual income every month, furnishing your apartment usually means you can earn more than if it's unfinished. As different type of furnished apartment carries different items, so choose your market as per customers' requirements.

4. Online Presence

You need to have a website or a social media page for your products/services as people expect to find just about everything on the Internet. According to Businessknowhow.com, an article reveals that in the U.S., the number of internet users (approximately 88.5 percent of the population) and e-commerce sales ($394.9 billion in 2016 according to the US Census Bureau) continue to rise and are expected to increase with each passing year.

If you don't do this, your business will fail as compared to your competitors who do at least have profiles on well-known social media sites. So, you need to hire professionals to create your website, if you have a business today. In addition to this, make your business accounts on Facebook, Twitter and other popular social media platforms where your target customers can usually be found.

(Image Source: Brandish Creative Group)

5. Insufficient Funds

Having insufficient capital is a destructive mistake for any failed business. Lack of operating fund shows that a business might not be able to pay its bills, taxes, property loan, and other financial commitments. New business owners often don't understand how much money they will need for startup and their business fails before they have had a fair chance to succeed. It's important to keep it in your mind that insufficient fund may jeopardize your day-to-day business operations.

So, you need to save as much money as you can if you want to avoid financial mismanagement for operating your business if you are into cleaning services industry or gifting industry. Start using professional business accounting software to keep records of all financial statements and to generate profit and loss statements as well. And remember, this is very important information that you need to run your business and know your business status in the industry.

6. Poor Location

Choosing right location for your business enables you to meet success in the industry. Your business fails if you don't do this. A well-selected location helps even a struggling business to ultimately survive.  But, a poor business location could convert your business into disaster even if it's a best-managed organization.

Before you build your business setup in an area, you need to research your target customers and the direct competition in that particular location. For example, If you are planning to open a restaurant with  pizza hut logo, open it near a school campus is a good idea as the increased rate of customers coming into your outlet and making a purchase will make up for the initial cost.

• Some of the components to consider:
• Where your target customers are
• Location of competitors
• Safety of building
• Local incentive programs for business start-ups in specific targeted areas

7. Entrepreneurial Excitement

When you start your new yet first business, you often get excited about new different ideas rather than focusing on the single items that your company needs most. And this enthusiasm may end up being a barrier for your business.

So you need to test every new idea against your business plan before deciding whether to undertake it or not and ask a question to yourself like do I have the skills and resources to implement this? This will save your business instead of losing this.

Wrapping It Up

Being an entrepreneur is a tough job when the first year results of your business are often inconsistent. No worries! You can do it very well. Learn from your mistakes, try new innovative approaches.