Why Do So Many New Businesses Fail?

Why Do So Many New Businesses Fail?

You may have noticed it in your own town or city, a new restaurant, shop, store, one day it is there, and the next day, where did it go???

In my own city someone recently opened up a camera shop, selling digital cameras. Which on the surface sounds like a safe business. However, if you look deeper, the camera and photo business has been changing for years.

With high quality digital cameras on our mobile phones, we are not purchasing that many new and expensive digital cameras.

Just as the great photo company Kodak.

Once a leader in photography, now they are reinventing themselves using Blockchain technology.

So obviously being in touch with not just technology, but the fickle buying public is important if you want to succeed in business.

And there also is a little luck. The right place at the right time.

There can be hundreds of reasons why a business may fail, these are just a few. But if you look at the “fail rates” for sole traders and other businesses, it is high. 60% failure rate for some.

Location, Location, Location

In some businesses, foot traffic is essential to bring in the business. Restaurants and some shops rely on foot traffic, so where they are located is important.

That is not to say some business thrive and they may be off the beaten path. There can be other reasons why they do well, word of mouth, exceptional service or quality of goods, either way, people find them.

It is no coincidence that there are High Streets, business centres, malls, and shopping districts. They attract shoppers, and shoppers know where to go for what they want.

If the mall or a huge store like many of them we have doesn’t have what you are looking for, you don’t need it….or you can get it online.

Online Presence

For may business, having an online presence is necessary if you want to thrive.

This can be anything form a web site, to online sales, to just a simple page telling people where you are, location again.

This also means social media.

Social media is a way to reach out to people, a lot of people, and also create a community for your service or products.

However, there can be some downsides to this, social media can also ruin a business.

Bad reviews, fake reviews, hackers, all can spell trouble in the social media world.

Social media is quick, customers can post good or bad reviews quickly. And if they are bad, they need to be dealt with quickly.

Experience: Doing What You Know or Do You Know What You Are Doing?

Many business fail simply due to lack of knowledge and experience of being in business.

Taking what you know and expanding on it to create a thriving company is a good way to succeed.

Trying to start a business because it is a dream of yours is all fine and good, but you may need some help to keep it going.

Some may say “I always wanted to own a pub”.

It sounds great, drinks there all the time, social events, people coming and going, being the centre of the community.

However, the reality is much different.

Serving drinks all evening, ordering supplies and having deliveries during the day, constantly cleaning, being a Publican is a hard job that requires long hours.

Doing what you know as a business can help in succeeding.

Capital Requirements

Many businesses fail in the first few years due to running out of money. They did not have a sound business plan or business model, that took into account the real time it would take to be profitable.

For some business the start-up costs alone are a small fortune. If you want to be in a product based industry, you need the products in to sell, meaning either you purchase them first, or buy as you sell, all of which costs money.

Clothing stores need to have clothes and outfits in stock, and of various sizes. All of which cost money, money you may not get back quickly.

It is easy to see why many businesses fail, but even more difficult to see how some succeed. Again, luck, knowing what you are doing, having a sound business model, and the money to sustain the company till it is profitable is crucial.

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Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”” data-mce-href=””>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”” data-mce-href=””>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”” data-mce-href=””>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.