The latest data from the U.S. Bureau of Labor Statistics (BLS) and LendingTree show that nearly 1 out of 5 businesses in America fail in their first year. This is approximately 18.4% of over 32.5 million businesses across the country. Businesses fail because of several factors, such as financial constraints, workforce issues, wrong marketing strategy, or even owner burnout.
Successful entrepreneur and real-estate millionaire Noelle Randall shares her insights on why most start-ups fail. With her 10-year industry experience, she lists down the biggest mistakes they commit and how they can avoid them:
1. Failure to secure funding
According to Noelle, one of the mistakes that businesses make is applying for money from lenders just when they need it. Whenever they draft their business plan, they focus on 'how to make money' and forget to include 'how to get money' for their capital, reserves, and extra expenses. This can happen due to the lack of business credit.
"Large businesses like Amazon, Walmart, and even Google do not use all of their money for their business. They all have business credit. Sometimes, the bigger the company, the bigger the debt there is. This is also the same with small businesses. They should start thinking ahead and thinking like a large business," Noelle shares.
Before starting any business, owners should consider business credit and funding. She emphasizes, "Business owners should not wait until they need money before they try to borrow money for their business. The best time to borrow money is when you are starting and when you don't need it."
Noelle wants to empower small businesses to get started on business credit. She is inviting business owners to her GROW YOUR WEALTH CHALLENGE, a live webcast event happening on January 14 and 15 that will help them further understand the step-by-step process of business credit acquisition, which can help individuals begin their entrepreneurial journey properly.
2. Failure to have business checking accounts
A business checking account is an essential tool for large and small enterprises. Banks and other financial institutions offer this service to allow businesses to deposit money, make payments, and manage finances. According to Noelle, utilizing business checking accounts in daily transactions is the best way to get business funding, which is critical for the business' growth.
"Just by showing three months' worth of business checking accounts, businesses can secure up to 50,000$ worth of funding for their business," Noelle expounds.
To add to this, Noelle shares that startups can easily integrate all their accounting systems through a banking system called North One. This allows entrepreneurs to track their expenses, revenue, and how their money goes in and out of their business checking accounts. The banking system also produces statements they can easily present to lenders when they apply for business funding.
3. Failure to make offers and sell the products
Securing business funding is vital for small businesses, but according to Noelle, they should also not skip the step of actually selling their products. Failure to do so can be attributed to various factors, including a lack of understanding of the target market, the inability to keep up with changing customer needs and preferences, ineffective marketing strategies, and inadequate resources.
The first step in selling business products is creating a comprehensive marketing plan. This should include an assessment of the target market, the competition, the company's competitive advantages, and the various channels available to reach the intended audience.
Selling these products or services is the business' key purpose, so it can continue to grow and thrive despite economic situations. Through careful analysis of these sales and how their market behaves towards every release, entrepreneurs can pivot accordingly to make better decisions and create valuable product offerings that can benefit the business' overall growth.
Focusing on what really matters
Running a startup can be an overwhelming job that often leads to mistakes that can possibly affect how the business operates. By being familiar with these common mistakes and consulting with experts like Noelle Randall, entrepreneurs can guarantee their business' success and focus on the key factors that can ultimately make way for a tremendous return on investment.
