4 Reasons Your Real Estate Business Might Fail
If hindsight is 20/20, then a lot of business people are wishing they knew then what they know now. I often hear statistics about 8 out of 10 businesses failing before their second year, while that figure seems dubious, you have to wonder why so many enterprises go under. We naturally assume that it’s because they weren’t good business ideas, maybe had bad management, lacked a solid foundation or offered subpar customer service. This may be true in a few instances, but we have all had the unhappy experience of learning that our favourite shop closed down, whether it’s a mom and pop business or national retailer. There are a number of reasons for businesses becoming insolvent, so it’s interesting to define in general terms what makes a good real estate business.
- They care about their customers and prioritize quality service.
- They are founded on solid ideas that fill or solve a consumer need.
- They have a reasonable profitability model.
- They have a sustainable stream of revenue.
- The have informed and flexible leadership.
Surprisingly, even businesses with the above qualities don’t always grow and thrive. These key points while fundamental to any businesses success just aren’t enough in and of themselves; there are other pitfalls that can impair growth or cause total collapse.
Failure To Evolve
Without change there can be no growth. Technology changes constantly, consumer trends change rapidly and your business must keep up. It is almost impossible to imagine a successful business from 2010 surviving today the way it did then. No matter how great your business is today, you will have to undergo some major changes along the way if you want to be around for the long term.
Competition
Business monopolies don’t exist anymore. When your business emerged it threatened your competition, which in turn responded with changes to threaten you back. If you were the first in your market, it wouldn’t have taken long for some entrepreneur to open his doors with a slightly better, yet marginally different product than you. You need to make it a priority to investigate every new company in your industry and then adapt your business to retain your edge.
Growing Pains
Growth should always be a good thing for business, but growing too slowly because of a fear of taking risks can handcuff your profits. Conversely rapid growth can become unmanageable too and can cause serious problems. Aim for steady, targeted growth incrementally introduced to your business.
Leadership
Without consistent, high-quality leadership establishing direction, making wise decisions and inspiring the team no business can succeed.
If you recognize any of these telltale signs in your business, it’s time to get to work and make the necessary changes. Stay focused, stay motivated and most importantly stay flexible to respond to unexpected circumstances, it’s a surefire way to ensure your business grows and thrives.
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