Through the ages of trade-by-barter, and other means of transaction, business has become our hallmark as humans and has constantly blended with civilization and technology. It will interest one to know that the more our society adapts to the 21st century, doing business also adjusts to these modern trends. And because business carries set of assigned risks, measures to constantly mitigate these risks are adhered to. From the little shops/outlets within our neighborhood engaging in selling of goods, to manufacturing industries and service-providing companies in addition to inter-country agreements and treaties, all is in a bid to engage in business.
Why do we venture into Business?
There are a lot of reasons why people have ventured or are planning to venture into business. One clear reason is due to the rising cost of responsibilities that current sources of income cannot argument. When basic expenditure surpasses projected income, people are bound to figure out how to make more income. Engaging in business is always another route to take in such instances. Unforeseen circumstances necessitate people venturing into businesses. Those circumstances may be attributed to the loss of jobs. The latter may be as a result of non-performance of the company, or rejuvenation of operational mode. In some establishments, when optimal efficiency is being pursued, changing from a labour-intensive working manner which is largely comprised of humans to automation mode which largely requires use of machines, jobs are lost and the urge to find something to do becomes intense. At times, the resort to business is unavoidable.
Some people understand their best-selling points and niche. They know what they stand to gain if they engage in certain businesses. Others are just of the opinion that being wealthy is a great function of having a solid business, and they pursue this dream. Having acquired the right skills for some people, they use those skills to engage in the business that resonates around their proficiency. It can be confidently said that going into business was quite accidental and expedient for some people. Had they other choices, they may not have delved into it. For others, it was a careful, methodical and systematic consideration which was planned.
Why do people fail in business?
As simple as it looks to start a business, so is it technical to remain afloat in it. Lack of clear strategy is one of the reasons for failing a business. Strategies help us to develop a roadmap on how we make sales and wither existential storms. As the level of producing or having something to sell may not be enough to succeed in business. That is why a lack of strategy may collapse a business in totality. Basic understanding of some accounting rules may also impede the success of business. The lack of basic accounting terminologies like cash-flow management, business analytics, periodic audit or inventory taking kills a business. Most at times, Micro Small and Medium Enterprises (MSMEs) because of their limitation in employing qualified administrative staff encounter cash flow problems that usually send the business parking.
On a larger scale, government policies can affect the failure of governments. Policies of government can at the fiscal side be an inhibitor to business success. If policies are geared towards the importation of goods that are being produced locally, local business may lose their share of the market. For organizations that ask for loans to run business, devaluation of the country currency or other monetary policies such as high interest rates of banks can negatively impact businesses of people. All in some reasons for business failure may come at the inexperience of the business holder which may be his fault. Some may be above their control and factors like that maybe wars, insurrection, and insecurity.
What determines business success?
Before the very start of the business, it is crucial that there be a strong value proposition for the business intended to be started. Value propositions work on the premise of establishing that business. They make one understand competition, gaps and the segment of the market that will most definitely patronize you. When the proposition of value is strong, the business is standing on a solid foundation and other business canvas model can be built on it.
It is good to understand the changes that are bound to occur. Literacy on entrepreneurship and management training is key to succeeding in business. Training of this nature will help in risk management and mitigation. It will help business to expand through combination of good management practice. It will equally help in understanding basic national indicators that affect business. These indicators can be good predictive tools for business investment or divestment.
Capacity development and competency is of the essence in succeeding in business. Continual satisfaction of customers rests squarely on the capacity to innovate and re-create. This creativity comes through competence, efficiency and skill. Therefore, it is best to become well-grounded in both technicality and operation of the business one aspires to do before actually starting.