Why most small businesses go bust

It’s not easy for business owners to succeed in today’s financial climate. Most people make poor strategic decisions and end up paying dearly in the long run. While passion makes part of the business success riddle, it is not enough, and knowing the nuts and bolts of running a business is paramount.

Sadly, according to the Australian Bureau of Statistics over 60 per cent of small businesses cease operating within the first three years of trading. Poor business skills are just as often a leading cause of failure as are products and services coming up short. Traditionally, owners are failing because they don’t understand the fundamentals of planning, budgeting and marketing. Understanding these play a key role in determining which direction your business needs to be taken as well as managing market reach and the all-important cash flow.

I know just how vital business competence is when it comes to running a financially viable business. The foundation that can be laid by undertaking business training and qualification courses are skills that are essential to ensure your business survives, he says. It is surprising to see how few business operators undertake any training in business disciplines. Considering the flexibility of online learning, the low cost and the reduction of the risk of failure they present, it is hard to understand why. Really, a business qualification ought to be compulsory.

There are a range of business diplomas available that can make stepping into the unknown a little less scary. And, when starting or taking on a business is a great time to enrol.

Programs for businesses cater for busy schedules and mounting time commitments. Study options offer flexibility and courses can be completed self-paced over 12 or 18 months and with online delivery it means that students have more control over how they learn. This approach also reflects the current industry shift towards digital mediums, most importantly, diplomas address the gaps found in many businesses. If these are left untreated, they present an avoidable risk that can cause serious issues for the survival of your business.

The areas that business owners struggle to deal with vary, however there are some common concerns that seem to cause the most business closures. These include digital marketing, communications, managing risk and budgets, recruitment, identifying and evaluating marketing opportunities, developing workplace policies and having operational plans. Getting your head around these concepts can save you a lot of hassles and they are all covered by courses such as the Diploma of Business for an example.

Recognising the pitfalls of business is easier when you know what to look out for. Obtaining the right skills and understanding can make or break a business and determine yours away from failing. With statistics not speaking in favour of small business survival, the importance of business training cannot be stressed enough.

Competence translates into confidence and when you have tools and strategies to grow your business with, the chances of remaining in business past the three-year threshold are far better than without. If you are thinking of starting a business or are already running one, signing up for a business course might just prove to be the best investment yet.

Hassan Younes, CEO, Training College of Australia

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