Lack of planning and strategies close companies in the first year of opening.

The dream of many Brazilians is to have a business and become a successful entrepreneur, but due to lack of planning, things can go out of plan and the result is companies closing their doors with less than a year in the market. According to the Service of Support to Micros and Small Enterprises (SEBRAE), 20% close for lack of capital and 7% for lack of profit in business, leading to the belief that companies close their doors for lack of proper management. Many small entrepreneurs start a business on their own, without the support of specialized entities and associations to give the necessary support in the beginning as well as lack of basic concepts of administration, stock, cash flow and accounting, making it hard to keep the business running for a long time.

For a business to have the expected success it is necessary to plan and organize internal projects, making the management more professional and efficient. Turning the company into a formal one makes the small entrepreneur get ahead of the competition and invest in the quality of his business. But why can’t companies maintain themselves?

 

1 – Difficulty in planning

The first months of a company’s life are considered the most difficult ones, since they need to have a name that impacts the market. With limited money and an unknown name on the market, any mistake leads to greater instability in keeping the company open. Therefore, in order to avoid such mistakes, it is essential to structure a business plan considering the target audience, competition, costs and as many variables as possible, to prevent the unforeseen events that may arise along the way.

 

2 – Copy business models

Inspiration is the key to creating new ideas, but many new entrepreneurs end up more than just getting inspired and fully copying the competitor’s business model. This attitude leads to failure, as the entrepreneur neglects the importance of adapting formulas to his own reality.

 

3 – Develop an incompatible planning with your reality

One of the main mistakes of the new entrepreneur is the development of a business plan that is different from the reality in which the company lives, adding very high values and thinking about reaching a high audience in a short period of time. This leads the entrepreneur to not achieve the expected results. Therefore, it is crucial for the company’s success and growth to study the market, understand the target audience, the branch of activity and the products it may offer, without running away from reality.

 

4 – Lack of experience

It is not necessary to have been an entrepreneur before to start a new business, but it is very important that the entrepreneur has skills and is aware of what he can do to leverage his business or what to do when facing a crisis. A solid professional training and coaching help to keep the company’s life much healthier. Invest in online courses, meetings, lectures and any range of information that can help build a better company.

 

5 – Lack of follow-up

The inspection of all your company’s activities is essential to understand what is happening. Many entrepreneurs close down activities early because they delegate functions and do not closely follow the work being done. The main ingredient of a successful business is work, so it is essential that the work of employees and collaborators is supervised, the accounts are reviewed and the entrepreneur follows closely the company’s revenues and expenses.

 

6 – Not segregating personal accounts from company accounts

This may be the main mistake of entrepreneurs: mixing the company’s accounts with personal finances. This act can result in great difficulty in the financial control of the company, creating irreversible mistakes, which could result in bankruptcy. Mixing personal accounts with company accounts may also bring future problems with the IRS, since withdrawals without accounting records can be understood as tax evasion.

 

7 – Lack of marketing strategies

A good promotion of your products and services makes your company known in the market, so it is very important to create marketing strategies, focus on communication, learn to enjoy online sales and social media. Although word-of-mouth still yields good publicity, social networks have made the process more accessible and with greater visibility. Bet on the optimization of these tools to attract customers in a continuous way and increase your profit.

 

8 – Cash Flow Problems

The lack of organization with finances is common in entrepreneurs who cannot keep the company active, this is because they do not plan expenses and investments in advance. To improve this, you need to create spreadsheets, graphs, notebooks and control all the information about your company during the week. This will allow you to identify your cash flow and monitor everything that happens in your company.