Business: Why business failed?

Why do many businesses fail after a short time after opening? Serious entrepreneurs will want to know the answers because you don’t want to start a business that you will need to shut down in a month. This had happened to many business owners from my observations. I have seen one owner next to my house open a clothing outlet and he has about 5 customers or less per day. Some day he has no customers. He finally shut down the store in about 1 year. I don’t know how he can survive for a whole years without good revenues but he managed to keep it open.

I noticed that this is one of the franchises and I have seen the same store at other locations. I think the store at the other locations may be doing better than this one because this one is in a very bad location. Location is everything when it comes to a business. I have also seen my friend’s business closed at this location. They didn’t do the research to see how much traffic is at this location. I lived there for a long time and the traffic here is very slow. The location is a quieter one and people don’t really go here except the locals. This particular business owner didn’t do his homework well.

When I walked into his store I also noticed a lot of things that will prevent his business from booming. I noticed that his store is right next to another discounted outlet and the price in that store is lower than his. People are packed in that store but they won’t go into his. This is his competitor. He’s losing to that competitor. When you open a business you have to look out for similar business that can hatch all of your customers. This is the case with this owner. Here was an example of a business that didn’t do so well. You would want to avoid everything that he did wrong. If you’ve went to business school then you would already know what to do.

This business owner sells brand names marked down clothing. I think that this type of merchandise would be sellable but at a different location. One of his major mistakes was that he chose a really low traffic location. This is never a good practice to choose a low traffic location. Again, if you studied business, you would not choose a low traffic location. Location is everything when it comes to business. High traffic is what you’re looking for. Some owners can’t afford rent at a mall, it can be very expensive.

My friend’s small food to go place across from this man’s clothing store also shut down. She didn’t get any traffic. The problem again is the bad location. There are houses all around this little business center and it looks like this center is only for the locals. Business will be better when you’re together with other major businesses where you end up with their customers. Customers would go grocery shopping and then go shopping at your clothing store too. However, rent is very high at a high traffic center; it could be up to $6000 a month.

In the business center that this man closed his business, the only good business was the supermarket. Supermarket doesn’t have many problems because people really need to buy grocery. Then you would know that the type of merchandise that you sell is also a big factor in your success or failure. If you have a restaurant or a mechanic shop, you don’t have to worry much because these are two hot businesses. If you’re selling home made paintings, it could be hard to get customers.  Some type of merchandise will not do well. People keep on doing it though. I wondering if they don’t know the art of business or it just that they are afraid to quit. I use to do business and sometimes you love your business so much that you don’t want to quit even though it’s suffering. You’re very emotionally attached to your business because you spend all your days and years trying to make it work.

There could be 20 reasons why your business won’t succeed. You have to know all of them and not do those things. I have seen one of my friend close up his shop and he was selling baby clothing at a fair price when everyone else in his district are also selling baby clothing. The problem here is that he has too much competition and his price is steep. People love the lower price.

Pricing is everything in business. People will buy something that is $1 just for the price when they don’t even know what it does. People love low price merchandise. That is just a fact. When store put on sales, there is an endless line of customers but the store is usually very empty when there are no sales. You have to work around with all of your factors to get the best result for your business.

This is when experience comes in; experience will saves you a lot of headache. If you’re a newbie then you need to do lots of research to make sure you have a good grip on your business. It’s possible to have a flourishing business if you have all the knowledge inside of you. There’s nothing worse than someone who doesn’t research and jump right into their business. You can always tell this business. I’ve seen a business that sells books in the middle of nowhere. I don’t think that the books business is very hot because people can read everything online nowadays or just read it for free in Barnes and Noble. Nowadays there are online versions of most books and magazine. People no longer buy hard copy. Sometimes they do because they want to collect it but the book business is not that lucrative unless you’re a big seller like Barnes and Noble. You have to decide whether your business is a hot one or not. Research is everything. You need to research about your field before you put your money and effort out there.