Why Do Mobile Businesses Fail (Avoid These Critical Mistakes)
Most budding entrepreneurs start looking for advice and ideas online as they decide to start a business. Unfortunately, much-contrasting information is littered on the web. Instead of getting positive results, they become confused with what is right and wrong. Some websites focus on purely blue skies. They do not dip a toe on storms that surprisingly come. As such, they do not give a clear direction on how to positively and realistically do steps to a successful business.
Mobile businesses are viable options if you want to kick off a new venture. They have lower overhead and startup costs compared to physical stores. They also have higher potentials to yield a positive return on investment (ROI). Yet, like small businesses, they are also prone to failures and mistakes.
According to studies, 78.5% of small businesses fail after a year. Among this percentage, those with owners younger than 30 years old are more likely to fail.
So, it may be wise to know why do businesses fail and how to avoid the following critical mistakes.
Lack of a Realistic and Solid Business Plan
One main reason why mobile businesses fail is the lack of a realistic and solid business plan. It is most especially true among young mobile business owners. They are good at creating mobile business ideas on paper. But these ideas do not work out well in reality. Creating a realistic and solid business plan means putting your passion to work. This, you can do, by doing thorough market research as you perform planning your business strategies.
First, define your unique value proposition (UVP). It is what differentiates your mobile business from others. For example, you love experimenting with shakes and are a health and fitness enthusiast. There are a lot of food trucks offering shakes on their menu, mostly during the hot summer. To stand out, you may want to offer a diet or healthy fruit and vegetable shakes that you have proven effective. Think of how others will remember you in a sea of mobile businesses competitors. It may not only be a unique product offering. But it may also be the ambiance, exceptional service, festive decors, neon hues, etc.
Another thing to consider is your customer base. When choosing a location or locations, you may need to survey if there are enough potential customers in the area to sustain your mobile business. From this customer base, decide how you will distribute, market, and promote your products and services. You will also need to create a cash flow projection for you to know how much cash reserve you will need to keep the business operation going. Clearly defining these factors will increase the chance of your mobile business to succeed. Never venture into something without planning. It is a critical mistake that will make your business fail.
Running Out of Funds
Maintaining funds is a major lifeline among all businesses. Without cash on hand, a mobile business may cease to operate. You will need a continuous supply of food ingredients if you operate a food truck. If you run out of funds, you can no longer pay your employees, maintenance bills, parking fees, and other expenses.
There are two main causes why mobile businesses can run out of funds. The first reason is not getting enough funds to sustain your mobile truck. Some entrepreneurs think that getting funded is easy. The truth is, it isn’t! Financing investors do not just contact people on a whim and sign a check for their business. You will need to prove your business’ worth to get a loan. With very little capital, you will struggle to stretch your finances. You have a higher chance of ending up without enough money to sustain your mobile business.
The second reason for running out of funds is poor financial management. Even if your mobile business has enough funds from investors, poor financial management can kill your cash flow. Most of the time, mobile business owners fail to keep a balanced inventory that matches their budget and sales. Remember that inventory shortage and overage are both critical to keeping a mobile business going. If you constantly fail to supply the demands of customers in your mobile business, you are losing the opportunity to get sales. If you have a supply that sits on your mobile truck for a long time, you are putting your money to a dead end. The key is to know your market and which of your offerings are top-selling or not.
Failure to Market Consistently
Another top reason why mobile businesses fail is the failure to market consistently. A mobile business does not stop at having a business plan and enough funds. There is a need for mobile truck operators to consistently market. It is for the business to grow and sustain itself. From time to time, you will need to monitor market trends and see if there is a need to alter your business plans. You should be flexible enough to pivot your business based on what is working or not.
It is also important to make your mobile business visible online. A large part of your target consumers search for products and services online. So, it is vital to have a business website, Google My Business account, Facebook Page, etc. to allow them to discover your mobile business. These online channels can all make your mobile business thrive.
Listening to your customer is also another way to market consistently. By nurturing a community of loyal clients, you are ensuring that your mobile business has sustainable revenue. Interact with them offline or online. Be helpful and quick when addressing complaints and queries. Happy customers are the best way to market your mobile business brand. Since time immemorial, word-out-mouth marketing has still been the number one driver to get a lot of sales.