A startup is a business organization that employs new and innovative ways to disrupt existing and new markets. They search for scalable and repeatable business ventures and experiment with them to find out how best the variables work and in what proportions.Every 9 out of 10 of startups fail and this is the harsh reality that entrepreneurs need to come to terms with The optimistic ones need to be reminded this once in a while so as to stay alert. Cold statistics like this are not meant to discourage entrepreneurs but to encourage them to work harder and smarter. There are many reasons why some startups work and why others don 't and fail. Some of the reasons are; 1. Poor business model Having a good and attractive website, service or product …show more content…
This may be due to poor timing of the entrepreneur in terms of product introduction. Some products are introduced into the market too early before their need arises or too late after the need for them has diminished. A good example is Tangaza money transfer in Kenya. Experts say its introduction into the market after Mpesa services had already spread its web all over the country was a major hit back on an otherwise brilliant idea and so Tangaza failed to live to its expectations. Tangaza was offering more than Mpesa could but it was simply late. If market timing is wrong then the startup will face major challenges picking up. Another problem affecting the market is lack of enough compelling reason for one to buy the product offered. The buyer may not find a reason to commit to purchasing the product at the existing prices. Sometimes the market size that needs the product and can afford it is not enough to sustain running of the …show more content…
A good location may help a struggling business survive and thrive well while even the best managers may fail to help a poorly located business. Factors to consider here include nearness to your customers, traffic and infrastructure, local incentives available, location of competitors and cost of locating the business there. 7. Rapid expansion and over expansion some businesses fail because they fail to understand when to expand and when to maintain. expansion should only be agreed upon after careful evaluation of the business performance. If the company is allowed to expand at higher rate then some departments will be overstressed leading to failure of the whole organization. 8. Poor planning A poorly planned business plan is a guarantee of fail. The entrepreneur needs to lay out a clear plan on how to get capital, where to set up the business, where to get manpower and at which rate, what to produce and how much of it and of course who to sell to. Some gaps are normal and expected but miracles should not be expected in a business. Bamba tv, a digital decoder run by Radio Africa is a good example of poor planning. They came into the business during the digital migration and in a rush to satisfy the hungry market they imported decoders with the wrong power specifications not used in Kenya hence they blew every time they were connected for testing. This led to major supermarkets withdrawing the product
The reason for this is that there are barriers to entry and exit to potential clients to the firm. Examples of these barriers would be, high capital. costs i.e. start up costs for new firms because the existing firms are already operating in a large market and are well established, they. would have created a brand image and would have brand loyalty. therefore, new firms will find it hard to capture the market.
Chet Craig is the Central Plant Manager of the Norris Company. He started as an expediter in the company's eastern plant and was quickly promoted to Production Supervisor in three years. After two years, he was promoted to Assistant to the Manager of the Eastern Plant. Five years later, Chet was transferred to the central plant as an Assistant, and after one month, was promoted to his current position.
Businesses do not plan to fail, they fail to plan. In my opinion, the planning process is a vital component towards successful operation of any business, thus i believe the above statement to be correct. According to Stephen Chapman, planning is defined as ‘the process of setting targets and deciding how to achieve them. It acts as a link between the business owner’s ideas and the actual operation of the business’. (2011 pg. 396) It is a managerial and leadership task and is such an integral part of managing a business, especially in today’s rapidly changing environment.
Although small businesses do not make a lot of major deals with large investors, most small businesses create profit revenue greater than large corporations. Small business creators are very brave considering only ten percent of small businesses survive. Unfortunately, some communities do not support local small businesses; they only support the large brand name and force small businesses to die out. Since small businesses will not have a name brand known around the world, many people from communities will not support them because they are not known on a national scale. “This, in turn will affect the local economy and drive capital out of their local economy. On average, for every one hundred dollars spent in an economy, if spent on a
...he market and lack of an all-round business plan covering all aspects. For the company’s discussed it will be very easy to achieve the goals and be one of the successful company’s in the country and global wise.
They point out that awareness and understanding of these causes assist companies in avoiding the growth stalls. In addition, the article demonstrates few practices that some companies use to predict and prevent the problem.
A good location can have a significant impact in attracting potential customers, thus improving sales. Especially in the case of a supermarket, location is more important than other business sector. Customers never drive long distances to only buy daily necessities. Moreover, favorable location gives efficiency to company’s logistics because unnecessary moving cost can be cut down. So, we can say that it is important factor for the successful operation of the supermarket.
STARTUP.com is the story of two best friends since a very young age coming up with an idea of basically paying traffic tickets and registering vehicles online! Kaleil Isaza Tuzman, a savvy business man who left his job at Goldman Sachs felt this idea would be the one that would fulfill his need of money for the rest of his life, and decided to do whatever he could to try and make this idea into a realization. He would later become in charge of all business aspects of the company and C.E.O. Tom Herman, the other half of this project was just in need of money and fast, for he had a daughter that he was unable to take care of. Tom would later become in charge of the technical aspect of the company and C.E.O. This product idea would soon attract a couple of other people to the point where they would even invest their own money just to see this happen. The product would later be named Govworks.com. ...
A study has been conducted to find the reasoning behind the surprisingly abrupt success decrease. It shows that one of main contributing factor includes a new increase in competitors in the area, which may start to create a rivalry with the industry. Competitors can become a huge danger towards companies since this gives the customers more options when deciding which product to purchase. There have also been new entrants, who of which are creating new and different products that are now available to the customers. Customers are also being persuaded by the power of other companies. This is now becoming a very competitive market, which can have a great effect on the company’s success. Although this is just one factor that seems to be affecting sales, there seems to be more contr...
It determines whether or not you business is earning money more than your invested capital or if it has reached your target profit for the month. Profitability is the primary goal of all business ventures. “Profitability is measured with income and expenses. Income is money generated from the activities of the business” (Hofstrand, n.d.). Compared to franchising, bootstrapping provides higher/ bigger possibility for growth. If you want to start one it's important to understand that startups are so hard that you can't be pointed off to the side and hope to succeed. You have to know that growth is what you're after. The good news is, if you get growth, everything else tends to fall into place. Which means you can use growth like a compass to make almost every decision you face. According to Graham, there are three phases of the growth of a successful business: There's an initial period of slow or no growth while the startup tries to figure out what it's doing. Second, as the startup figures out how to make something lots of people want and how to reach those people, there's a period of rapid growth. Lastly, eventually a successful startup will grow into a big company. Growth will slow, partly due to internal limits and partly because the company is starting to bump up against the limits of the markets it serves.” (Graham, n.d.). In starting a new business, there is higher or bigger possibility for growth because one
Entrepreneurship is not generally the same as maintaining a business, however the two may cover fundamentally. Most entrepreneurs are profoundly autonomous, which can bring about issues when their endeavors succeed. In a small organization, however this is unrealistic once the organization has become past a certain
We learned a lot of things in this course, but I think the most important lesson I learned is that it’s not easy to be an entrepreneur. I was surprised to hear in the first class that 80% of startups fail, but after reading The Art of Start and E-myth Revisited I understood why this happens more often than one might expects. Some people start their own businesses for the wrong reason and some start with wrong mindset. I’ve always thought that if someone has a brilliant business idea and hardworking they will succeed and grow their business. However, now I know that there are many things to consider before starting any business. In fact, there are many strategies that an entrepreneur could follow to achieve success, such as know your customers, work “on” the business, and how
...not just the financial issues for example equity shares, turnover and profitability. Before any growth entrepreneur need to have a plan to ensure that they know the risk and what problems will be appear and the solution to solve the problem. Although a growth plan is times consuming to be preparing but other company would like to look at the plan before doing anything. Also entrepreneurs always need to beware of the company vision is it similar to each other, culture and the communication also will affect the result and should be considered carefully. Those are the main reasons to make company businesses successful or failures in few years. Furthermore, this method cannot predict one thing is the timing, sometimes entrepreneurs miss the right time to growth their company because of the physical problem like earthquake or hurricane occurs which no one can predict it.
A challenge in strategic planning is to decide what bits and where bits of information will be used to support business decisions. In general, strategic plans can fail for two types of reasons: inappropriate strategy and poor implementation.
Business involved by two or more members of the family and is owned within the family is the simplest way to define family business. In this type of business the positions in the company is filled according the family blood. The founder of the business is usually the skull of the company, the rest of the positions are taken place by the family member which are usually higher positions where else other positions are filled by non family members.