Home ENTREPRENEUR’S CORNER WHY SOME BUSINESS PLANS FAIL

WHY SOME BUSINESS PLANS FAIL

by Brenda

The road to entrepreneurship requires a carefully selected plan to map out the business idea and the future direction of the business. Many entrepreneurs draw up a business plan to develop the business opportunity, but sometimes, the plan is unsuccessful and is never able to exploit the defined opportunity. While many do not have the resources available to do a good job, others do not have the skill needed to propel the business venture to the desired level. Below are reasons why some business plans fail.

To begin with is unreasonable goals set by the entrepreneur. For example, starting a food processing company without taking into consideration the changing seasons and perishable nature of raw unprocessed food will be an action in futility. In the end, deadlines will not be met because goals were not realistic.

Lack of commitment to the business idea is also another reason why some business plans fail. The entrepreneurial process is a very time-consuming phase that requires a lot of commitment to the business plan. An entrepreneur’s inability to prioritize the important things that need to be done will create loopholes in the business venture. This will make it extremely difficult to meet set targets and ultimately lead to the failure of the business.

Lack of the requisite skill and experience can also hamper the success of the business venture. Every business plan requires a fair knowledge of the industry or market being entered into. An entrepreneur must get the necessary education about the business opportunity. Failure to do so may create huge lapses in the business venture.

The inability of the entrepreneur to detect potential threats or weaknesses to the business can lead to business failure. The uncertainty in business environments is a constant risk to emerging businesses. As such it is important for the entrepreneur to adapt to the changing conditions such as the economy, technology, customers or competition, all of which have the potential to change the direction of the business plan. Failure to do so will cost the entrepreneur dearly if revisions to the business plan are not made.

Lack of knowledge about changing customer needs. This is also a key reason why many business plans fail. Before entering into a business venture, the entrepreneur must be sure that the business opportunity is viable enough with significant market for the product or service. The goals therefore need to be measured against customer needs. Research must be done extensively, taking into consideration market factors. Failure on the part of the entrepreneur to do so is tantamount to the collapse of the business.

Altogether, the entrepreneur’s ability to be sensitive to the business environment to revise the business plan if need be, to meet the changes in the environment, will increase the chances of success.

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