In the first few years of business, companies face a lot of challenges. Statistics prove that the majority of businesses were not able to succeed in managing these challenges efficiently!
According to the data from the U.S. Bureau of Labour Statistics, approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses survived for 15 years or more. This article explores why small businesses fail and how a PEO can fix it.
Top Reasons For The Failure Of New Businesses
- Lack of Market Research
Many new businesses fail because of proper market research. Businesses which haven’t identified the demands of the market are more likely to fail.
- Financial Hurdles
Starting a business needs capital and insufficient funding can lead to the failure of the business. Poor financial management or not investing in marketing and unwanted costs of the business can also lead to failure.
- Poor Management
A business needs strong leadership and management skills to succeed. This includes decision-making, marketing, business planning, and human resources. Poor or mismanagement of these areas can affect the business adversely.
Every industry is having competition and it is more challenging for new businesses. They may not have the brand recognition to stand out from the existing competitors.
How Can A PEO Overcome These Challenges?
A PEO can play a vital role in identifying and effectively addressing the challenges faced by new businesses. Most of the hurdles can be addressed with the help of the efficient HR services offered by a PEO. Here are some ways in which PEO services can help you to overcome your challenges;
Recruitment and Selection:
PEO can ensure that the company hires people with the right talent. They can recruit candidates who match the values of your company. Hiring individuals who are passionate, creative, and willing to take calculated risks can help the company to succeed.
Establishing Company Policies:
Every company needs its own rules and policies to operate. It should be ensured that employees understand important information about company guidelines, procedures, and benefits. Small businesses can struggle with establishing company policies and training employees accordingly which can end up slowing growth. Your PEO partner can help you plan the policies and process them.
A PEO can help you manage your finances by reducing unnecessary expenses, managing taxes and employee benefits, retaining employees, and many more ways. They can increase the productivity of your business with effective HR strategies and accelerate the growth of your business.
Compliance with employment laws is another challenge that new businesses struggle with. PEO helps you to know your federal, state, and local laws to understand the obligations of your business.