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Why Small Business in India Fail?

Amidst cut throat competition,new products/services coming up daily it is important for business to survive and flourish. Below are the major reasons why Small Business in India fail.

  1. Lack of Planning 

Planning is a basic necessity for any business to be successful. How much planning have we done before starting a business in a great way is proportional for our business to become successful. A major difference between us Indians and the Western world Is that they do extensive planning before starting any business whereas our  Indian businessmen first start business and then think to plan.

Planning provides a clear-cut Vision and future Road map for the business and what they exactly want to achieve in the next 5 years. Both short-Term and Long-Term planning are important for a Business to survive and eventually succeed.

Also, non viable planning can lead to a business failure, thus thoughtful planning is utmost important for the success of any business. 

  1. Unable to manage funds

A basic need to start any business is funds. A businessman starts a business with initial capital but is not enough as they are not able to handle the operational costs to run that business. This mainly happens because the inflow of money i.e. sales is not proportional to the outflow. New businesses need time for the sales to flourish so to keep a back of funds for that time is very important which many businessmen miss out.

Focus should always be on how to reduce expenses and increase the profits. This can be achieved by taking help of technology,training team, proper management etc. Also one more important aspect of managing funds is that many businessmen excessively drain out money from their existing business and invest it somewhere else which creates a problem in the long run.

Thus, the churning of funds should happen on a regular basis. If cash flow is not managed properly then this might lead to a condition where the funds may get over which in turn leads to closing down of business.

  1. Lack of Innovation

Innovation is a very important tool in today’s world for any business to flourish and be successful. We see many companies who are running for many years but are still struggling to survive in the competitive market whereas some companies come up with innovative ideas or services and disrupt the market and even go out to become a unicorn. So the main learning we have to derive from this is that we have to innovate, not only once but on a regular basis to be the market leader.

It is very important to understand that we will have to come out with an altogether new idea or innovate something new in existing products or services which our competitors are not offering. It could be anything, features or unique design etc. We will have to bring up our Unique Selling proposition (USP) to be different in the market. This is very important then only you will be able to attract customers or else why will they come to you instead of those who have been in the market for many years.

Thus by continuous innovation you can  not only have an advantage over your competitors but also can go on to become market leaders. Businessmen should always keep on doing research so they can bring innovative products to the market.

  1. Wrong Hiring

It is  rightly said by Steve Jobs that  “Great things in a business are never done by one person.They are done by a team of people.” 

Building a powerful and effective team is as important as everything else it takes for a business to be successful. A clever businessman will never turn a blind eye on building a team with the right skillset because he very well knows that he alone will not be able to achieve the vision of the company. To build a powerful team he will have to focus on building the right culture in the company and also adopt HR best practices. Also if a a right employee is hired he should be aligned with the vision of the company or else you could loose them due to clash of interest.

Businessmen should not focus on daily operations in business but instead should hire the right person for the right position who will take care of the daily operations. Businessmen's focus should be on other important things like market research,product/service  betterment,customer feedback, innovation etc.

Thus hire the best Resources available and make your business the first choice for your customers.

  1. Lack of Passion

A businessman needs to be extremely passionate about the product/service offered to the market. Many businessmen have great ideas but they are not able to survive in this competitive market due to lack of passion. Many businessmen start the business just by seeing others but they do not have conviction in their own product or service. Many times a businessman starts losing passion as they do not have enough knowledge, but just remember there are many experts available in the market so never hesitate to take help.

A small wrong or negative feedback from customers and they start doubting their own product/service. In this case we need to understand that no one is perfect and we can always improve them by taking those feedbacks. If a businessman is not passionate they the business becomes like a regular work for them which they just have to complete.

Thus strong passion and conviction is very necessary for any business to be successful. We need to keep that passion going till the business reaches its peak and its full potential. 

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