Behind every successful business is a good business idea. A pillar that supports the fundamentals of your business. It is true that one idea takes you to places, turn your fortune around and motivate you into becoming an entrepreneur. Unfortunately, this does not happen to everyone. Just as if a good idea can set the ground rules for your business, a bad one can bring it down anytime.
We have seen multi-millionaire companies like Amazon, Google, Uber and Microsoft who all have been created from one great idea. However, during this process, a number of others collapsed right after their launch. What caused their downfall?
The article below sheds light on some of the most common business ideas that fail even before they are executed.
Independently Owned Restaurants
With the bustling Worldwide B2B Marketplace, many businesses suffer at the hands of increasing competition. A few of them include independently owned Restaurants. According to an estimate, over 60% of them fail in the first five years after they are launched. This may include lower capital investment, a new and unknown venture to the audience and lesser market experience of the entrepreneur.
Businesses Involving Direct Sales
Direct sales ventures involve the business entrepreneurs directly selling products to the customers. This could be either an e-commerce business or a retail store depending on the capital investment. These type of businesses usually require more risk and start-up capital to establish. They also promise quick deliveries making customers lack patience and get more hyped up with the services.
From what we have seen, a number of such start-ups suffer from a higher failure rate because, in most situations, the business owners lack the drive and stamina to carry on what they once started. In addition, a few of them also lack the training and support that is required for this type of business.
Retail stores among many others fall into the category of most common failed ideas of businesses ever launched. Regardless of what type of products you’re selling – consumer goods, apparel or even grocery, managing a retail store is ten times more complicated than it was ten years ago. With the evolution of online businesses, many retail brands are finding it hard to survive the increasing rate of competition. Other factors that include are restricted budgets, no prime location for retail stores, and less investment capital for buying stocks.
Another type of businesses that are most prone to failures is consulting firms and agencies. With the growing trend, anyone nowadays claims to be a consultant without having any prior experience or business exposure. Whether its real estate, psychology, career counselling, or media consulting, businesses fail because of lack of professionals involved. This is why fewer people avail their services because they do not trust the business owners in the first place.
It can be concluded that before stepping into any genre of business it’s important to foresee the potential in the idea itself, based on facts and stats revolving around your audience.