Small Business Finance Blog

Financial tips and hacks for small business owners

  • Home
  • Blog
  • About the SBFB
You are here: Home / Small business / Common Reasons Why a Retail Business Could Fail

Common Reasons Why a Retail Business Could Fail

January 8, 2019 By Editor

Setting up and running your very own retail business can be one of the most challenging things you’ll ever do in your life. Sure, setting it up and hiring employees can seem tough, but the real challenge is being able to survive your first few weeks and lose as little money as you can. Every business understands that the first couple of months are the hardest because you’re constantly losing money trying to recuperate your costs, and this process can last for years if your business isn’t stable.

So to help you prepare for the worst, we’ve listed a couple of common reasons why retail businesses often fail so that you can avoid them in the future.

Trying to do too much

Some retail businesses start with a simple and effective idea, but if they don’t get many customers in the first few weeks then they might start to diversify and offer more regular products and services in an attempt to draw in a wider audience. Trying to fit too many customer profiles will be difficult to manage and should be avoided. Instead, specialize your store to attract a specific audience and provide for customers that you can engage with.

Natural or man-made disasters

Whether it’s a fire started by an accident or heavy winds that damage your store, natural and man-made disasters can cause havoc to an otherwise stable business. The reputation will be hurt, customers will find alternatives and you’ll lose a lot of stock if you’re not insured. Luckily, there are services like fire and smoke restoration that can help you get back on track, but it will still be difficult trying to bounce back unless you’ve built solid relationships with your customers.

Staff that simply don’t care

It’s vital that your retail business is operated by staff that care and are motivated to provide a good service to the customer. Fail this and you’ll quickly lose customers and word will spread that your business isn’t a very welcoming one.

Lack of investment

Many new entrepreneurs start a retail business while severely underestimating the amount of money they need to pay in order to get a good start. Purchasing or renting property or land, developing it, advertising your company, hiring staff and even paying for office supplies will add up and get expensive.

Poor management team

You might officially be the business owner, but that doesn’t mean you’re also the manager. That’s why many retail business owners will hire managers to help them, but if they prove to be incompetent then they’ll quickly ruin your business and this can spiral out of control very quickly.

Bad customer service

Customers won’t return if they’ve had a negative experience, so make sure you monitor your team and look at feedback to see what could be improved or changed. If you notice employees being out of line or disrupting the customer experience, then at least you’ve identified why your customers are unhappy and can deal with the problem personally.

Filed Under: Small business

Connect with the Small Business Finance Blog Editorial Team

  • Email

Recent posts

How to Avoid High Bounce Rates in Email Marketing

There is no shortage of reasons why email marketing is a crucial form of marketing. For many … [Keep reading...]

Building real relationships with relationship marketing

While traditional marketing focuses on one-off sales, relationship marketing is all about long-term … [Keep reading...]

Making Tax Digital – The Benefits for your Business

From the 1st of April 2019, the Government’s Making Tax Digital Initiative will be rolled out across … [Keep reading...]

Should I Sell My Home Or Rent It?

For many homeowners and landlords, the question of ‘selling vs. renting’ is a huge one that requires … [Keep reading...]

Streamline Your Business

As an efficient business owner or manager, you’ve learned that it’s essential to create a routine in … [Keep reading...]

Six Tips For Direct Marketing

Direct marketing, love it or hate those emails land in your inbox multiple times a day and whether … [Keep reading...]

On The Defense: Steps To Protect Your Business Reputation

With social media possessing the capability to turn unwanted attention or negative feedback into a … [Keep reading...]

Make Your Business A Show Stopper

This is a hard one to master for a lot of you. It’s so easy for a business to become completely dull … [Keep reading...]

Copyright © 2003 - 2019 | All rights reserved.

Positive SSL