Some common reasons why your business is not profitable or doing well
What do you do when your business is not doing well? Do you throw in the towel or keep going and try to figure out why? As a small business owner, it can be very difficult and frustrating when your business is not growing the way you’d like.
While there are lots of reasons why businesses fail, some are more common (and easily fixed), than others. So, before you quit, invest in a business coach, or make some bad decisions, let me tell you some common reasons why businesses struggle, and maybe you can identify with some of the reasons.
Doing things differently or making some changes might be all that’s required to get your business back on track. Now, let’s see if we can find the reason why your business is struggling or not making any money.
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1. PART-TIME IN APPROACH EQUALS BUSINESS NOT WORKING WELL
When I say part-time in approach, I don’t mean that your business is failing because you are a part-time business owner maybe with a full-time job. It’s possible to run a successful business part-time, and many people choose to keep their full-time jobs while working on their business.
What I am referring to is how you approach your business. While you can work only part-time on your business, you still have to approach it with full commitment if you want to be successful.
Here’s what I mean.
- You can’t work on your business only when you feel like it.
- You don’t have set times or hours when you work on your business. You do it randomly or with no real purpose behind it.
- Your business lacks structure or a plan for growing or moving forward.
- You treat your business like a hobby.
- No set goals for your business.
As you can see, a part-time approach to your business doesn’t lend itself to much success. If your business is not working well, the first thing you should look at is your approach. How do you approach your business? Is it a serious venture for you?
Does it matter whether you succeed or not?
If your goal is to succeed, then you have to change the way you approach entrepreneurship. So, instead of saying “My business is not doing well,” ask yourself, “Am I giving my all to my business?”
2. LACK OF STRATEGY
Do you have a business strategy? What is it? Can you articulate it?
Unfortunately, many small businesses lack a proper strategy, so they struggle to move in the direction they want to go.
Here’s why you need a proper and well-articulated strategy for your business.
- You won’t know what tasks you should focus on without a clear strategy.
- You will waste a lot of time on trial and error with no discernible results.
- Your business won’t meet its revenue or profit goals without a clear strategy.
- You will find yourself relying on “luck” more than you should.
Without a strategic plan for your business, your business can’t thrive or meet its objectives, so it’s really important to have a business strategy if you want to succeed.
Your business strategy should include your goals and objectives, set plan, and actions, and tactics for achieving your goals. Your strategy also includes how you plan to compete in your market or industry and what you plan to offer potential customers.
You can’t keep throwing different things at the wall hoping something sticks. You need a coherent plan if you want your business to do well long term. Finally, if you have a strategy that isn’t working, then it’s time to fine-tune it or ditch it for something better.
If you need some help creating a business strategy, check out the articles below.
3. LACK OF CLARITY OR FOCUS
A lack of clarity or focus is a common reason for business failure. You can’t grow your business if you lack clarity or a clear focus. So, what does it mean to have clarity in business?
Clarity in business means having clear goals and the ability to communicate or articulate what those goals are. When you have clarity, you know exactly what you should be working on at any given time.
When you have clarity in business, it takes the guesswork or uncertainty out of your business and saves you a lot of time.
Here’s what happens when you lack clarity in business.
- You focus on two many projects and end up not completing any of them.
- Your messaging is confusing to your potential customers and employees.
- You can’t establish yourself as an expert in your field.
- Your business is indistinguishable from others
It takes discipline to maintain clarity in business with so many things vying for your attention. Many business owners suffer from shiny-object syndrome, that’s why they are easily pulled away in different directions.
When every idea sound like a good idea to be pursued, it becomes difficult to stand out or distinguish yourself from your competitors.
So, if your business is not making money or growing, you need to take a step back to assess if your focus is in the right place. Are you clear on your business goals? Do you know who you are or what you want to be?
What does your business stand for?
4. INEFFECTIVE MARKETING
If you are doing everything you think you should in your business, yet you struggle to attract enough customers, ineffective marketing may be the problem.
I will be the first person to say that marketing is hard, and it’s not my favorite thing to do. And, I think what makes it even harder is knowing what marketing strategy to use for your business.
With so many different marketing strategies to choose from, how do you know which one to pick without spending a lot of time or money on marketing?
While these are valid concerns and questions, the truth is that some marketing strategies are more effective than others, and finding the right marketing strategy for your business takes time and knowledge.
There are lots of reasons why your marketing strategy may be ineffective. Here are some of the most common ones.
- No clear target market. Do you know who your customers are?
- Mixed messaging. Is your messaging clear or is it confusing to potential customers? Do your customers know exactly what you are offering?
- No clear strategy. Yes, you need a marketing strategy for your business. A marketing strategy is a proposed plan for attracting clients or customers to your business. Do you have a clear strategy?
- No marketing budget. Unfortunately, it’s become harder to get free marketing or traffic to your business. To succeed, you will need a marketing budget, no matter how small. Lack of resources to develop and execute a marketing strategy is one of the biggest things that hold businesses back.
The problem of ineffective marketing is very common with small businesses. It’s possible to rise above this challenge by investing time and resources into creating an effective marketing strategy.
5. LAZINESS AND LACK OF EFFORT
In many ways, being an employee is so much easier than being an entrepreneur. As an employee in a non-managerial role, your focus is to clock in, do the work that’s assigned to you, then clock out (of course, I am being simplistic here). But, the point I am trying to make is that the success or failure of your employer probably didn’t rest on you.
Unfortunately, when you are an entrepreneur, you don’t have the luxury of just clocking in and out because your business rises or falls with you.
Starting a business is the easy part, but growing your business is where the hard work is. Lots of business owners think business is easy and requires little effort. Nothing could be further from the truth.
Running a business requires constant effort to make it work. Lots of people underestimate how much time and effort it takes to grow a business, no wonder some quit or become disillusioned if they don’t see quick results.
You are not going to do well or make money with a lazy attitude. You can forget about all those unbelievable success stories you read or hear about.
For the common entrepreneur, no effort means no reward. So, if your business is doing poorly, start by looking at how much effort you are putting into your business. A lazy approach to business is a recipe for failure.
6. LACK BUSINESS KNOWLEDGE OR SKILLS
Entrepreneurship requires knowledge about business and some specific set of skills. While passion has its place in business, ultimately, you have to understand entrepreneurship and have the right skills for the job.
It’s true you don’t need a business degree to start or run a business, but you do need to have the necessary skills if your business is to succeed.
Far too many entrepreneurs don’t have the required knowledge or skills to succeed in business, and many are unwilling to invest time or money to acquire the skills or knowledge they need.
Self-education is a necessary part of running a business. You must learn to invest in yourself by identifying knowledge gaps and doing everything you can to close those gaps.
While you probably can’t learn everything (you can outsource some things), there are some basic skills every business owner should have. They include:
- Money management. How to make a profit, generate revenue, and keep your business cash flow positive.
- Marketing and sales skills.
- Keeping a proper and accurate record of your business.
- Negotiating skills.
- Leadership and management skills.
- Goal setting and planning skills.
- Communication skills.
While you don’t need to be an expert at every single skill, you should have adequate mastery of the skills listed above. If you suspect you don’t have some of these basic skills, do an assessment of your current skills, identify gaps, then create an action plan for addressing those gaps.
That’s how you acquire the skills you need to become a solid entrepreneur.
7. NOT ASKING FOR HELP OR SEEKING A SOLUTION TO YOUR PROBLEMS
As a business owner, it’s hard to identify problems or see obvious solutions because you are too close to your business emotionally. And, in some cases, even when you know what the problem is, you are reluctant to admit it or ask for help.
Entrepreneurship can be lonely especially if you lack support from friends or family. So, it’s understandable why some of you may feel reluctant to admit your business is not doing well or ask for help.
However, not asking for help means you will remain stuck or continue to struggle. Unless you enjoy spinning your wheels, asking for help or finding solutions to your problems seems like the best choice.
Another mistake business owners make is waiting until things get really bad before they start looking for a solution. You don’t want to wait until your business is in a precarious position before you look for a solution.
You should address problems as soon as they arise. If you can’t come up with a solution, do some research to find out where you can go for help. There are lots of ways to come up with solutions for your business problems.
- You can work with a business coach.
- Do some independent research to find answers to your questions.
- Find a mentor or community of other entrepreneurs.
- Pay someone to solve a specific problem.
Needless to say, you have to do some due diligence before accepting or implementing any business advice. Use only credible sources and avoid anything that seems suspicious or too good to be true.
Closing thoughts on why your business is failing
There are lots of reasons why businesses fail, but the ones in this post are very common.
The good news is that a lot of times, it’s possible to turn a struggling business around. It just requires time and a lot of effort to reverse course.
So, if you really love your business and want to save it, hang in there and use some of the tips in this post to get back on track. If things are really bad, try working with a business coach.
If you are a Christian, read the post below for some tips on finding the right business coach for you.
Are you an entrepreneur with a struggling business? Why do you think your business is not doing well?