I think most business die in one of these 2 circumstances:
- getting too much business (or more than the business growth can absorb)
- getting too little business for the current business level (or not covering the costs)
- getting unappropriated business
While case 2 is probably the most known factor in building an entrepreneurship fear, the first one is also getting it’s shares of casualties. Usually it goes like this: most business start with the goal to fulfill the needs in a niche market, and since the business plan time, the expectations are to handle a number of customers. If things start well, you can expect that the initial number of customers will grow. But besides the growth in customer numbers, sometimes there is some other kind of growth that can affect your sales. And that is the growth of each customer’s business.
Some of your customers will probably grow at an accelerated speed – that’s usually good- unless they grow much more faster than you. Because if they grow much more faster than you, it comes a time when your services are not enough and unfortunately instead of helping you grow as well, it might kill you. Because that’s unappropriated business for you, all the sudden.
On the other hand, a lot of crashes happen when the business expanded more quickly than the customers. You just hire too many people or make investments in technology more than the need on the market.
Hm…not a very helpful post, I think.
