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These 10 Things Will Kill Your Business Venture If You’re Not Careful!

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These 10 Things Will Kill Your Business Venture If You’re Not Careful!

When it comes to running a successful business, there are a number of business attributes that you need to watch out for as these, if not engaged with and executed properly, will slowly kill off any potential for success. A business venture that is floundering, is often one that does not have a business plan, has not created an environment for growth, and despite the owner’s best efforts, is not getting enough time and energy invested into it. Although there are a number of things that can actually kill a business, in this article, we are going to identify some factors that can contribute to this and give you some insight on what to do so that you can secure the extra footing that you need for your business to become successful. After all, knowledge is power and if you know how to identify slow business killers, you can stop them from completely dragging your business off the grid.

  1. You Have a Terrible Website Design or No Website At All: in this day and age, if you do not have an online presence, you are missing out on massive amounts of exposure. It is practically necessary to have a professional website up and running for your business regardless of what market or niche your business is in. Why? The internet provides customers with buying power, as it allows them to assess things like price point, quality, and reputation. This includes, checking out vendors online for their goods and services, reputation, testimonials, and pricing options. This means, that if you want your business to be part of the buying decision process, it must be highly visible and easily found on the web. A good website design has a modern design, is easy to navigate, has an online shopping cart feature, and a way to contact the owner.
  1. You Have Poor Customer Service: when a company is doing well in the realm of customer service, it is very easy to foster long-term clients through customer loyalty. This pays in the way of repeat business, referrals, and positive testimonials. If you have poor customer service, this results in a negative experience for your customer and often degrades and devalues your company as a whole, impacting the potential for future customers. If you are a smaller business, make sure to remain in contact with customers after each sale and respond to all inquiries.
  1. Your Pricing Is Too High: a lot of businesses will lose a lot of customers because they have inflexible and noncompetitive pricing on products and goods. This means that when a customer compares your pricing to another shop, the other shop will get the business if they have a better price. In addition to this, pricing that is too low will cause you to lose a profit. If you want to thrive, you need to have competitive pricing that takes into account the market and your competitors.
  1. Your Physical Store is in a Bad Location: if your business venture is using a brick and mortar location, do an assessment on the location. Are you in a desirable area and is it easy for customers to reach you? If your business depends on drive-by traffic or foot traffic and is not in a desirable area, your business is going to suffer greatly. Think about using signage for visibility and make it easier to access with proper ramps and directions.
  1. Your Marketing Strategy is Poor: if you are using the wrong platforms to market your business or are sending out the wrong message on the right platform, you are going to get limited results while still paying out a small fortune.
  1. You Lacked Enough Capital At Launch: having enough capital at launch is imperative for meeting financial obligations in those first few months. It is way easier to get a lender to provide you with $100,000 then it is to get $50,000 twice. If your lender thinks you have planned poorly, mismanaged the capital, or that your business isn’t viable, you could go under really quickly.
  1. You Are Not Managing Your Costs Correctly: anyone who goes into a business venture is looking to make a profit and to do that, you must make more in revenues then what you shell out in expenses. This sounds a lot easier to do then it actually is, as a business has numerous upfront and reoccurring expenses that must be maintained. To operate in a profit, get a handle on your costs and reduce them if necessary.
  1. You Haven’t Examined The Value You Provide Consumers: if your business venture launch goes smoothly on opening weekend but then slows down substantially, take a look at why this might be. Your pricing structure may be priced to high for the area you are in or you may have a lot of competition in the market. Make sure that what you are selling to the consumer comes with a high-value; meaning they get a lot out of what you are selling for a reasonable price.
  1. You Only Have a One-Off Revenue Model: use memberships, subscriptions, and service contracts to keep buyers coming in. A one-off revenue model will bring in revenue but you run the high risk of never having repeat buyers. This, in turn, makes your business unsustainable.
  1. Not Knowing The Competition: if you do not know who you are up against, then you will have an exceedingly hard time growing. Why? Failure to learn about what your competitors offer, how they work, and how they survive will limit you on providing something unique to your customer base.

Although it can be very frustrating seeing a business that is similar to yours, thriving in the marketplace, it actually is a common occurrence. Remember that every business will have its own challenges, successes, and growth and in so long as you take time to review all areas of your business carefully, you can stop from being negatively impacted by the above factors.

Business

Euro zone business activity shrank in January as lockdowns hit services

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Euro zone business activity shrank in January as lockdowns hit services 1

By Jonathan Cable

LONDON (Reuters) – Economic activity in the euro zone shrank markedly in January as lockdown restrictions to contain the coronavirus pandemic hit the bloc’s dominant service industry hard, a survey showed.

With hospitality and entertainment venues forced to remain closed across much of the continent the survey highlighted a sharp contraction in the services industry but also showed manufacturing remained strong as factories largely remained open.

IHS Markit’s flash composite PMI, seen as a good guide to economic health, fell further below the 50 mark separating growth from contraction to 47.5 in January from December’s 49.1. A Reuters poll had predicted a fall to 47.6.

“A double-dip recession for the euro zone economy is looking increasingly inevitable as tighter COVID-19 restrictions took a further toll on businesses in January,” said Chris Williamson, chief business economist at IHS Markit.

“Some encouragement comes from the downturn being less severe than in the spring of last year, reflecting the ongoing relative resilience of manufacturing, rising demand for exported goods and the lockdown measures having been less stringent on average than last year.”

The bloc’s economy was expected to grow 0.6% this quarter, a Reuters poll showed earlier this week, and will return to its pre-COVID-19 level within two years on hopes the rollout of vaccines will allow a return to some form of normality. [ECILT/EU]

A PMI covering the bloc’s dominant service industry dropped to 45.0 from 46.4, exceeding expectations in a Reuters poll that had predicted a steeper fall to 44.5 and still a long way from historic lows at the start of the pandemic.

With activity still in decline and restrictions likely to be in place for some time yet, services firms were forced to chop their charges. The output price index fell to 46.9 from 48.4, its lowest reading since June.

That will be disappointing for policymakers at the European Central Bank – who on Thursday left policy unchanged – as uncomfortably low inflation has been a thorn in the ECB’s side for years.

Factory activity remained strong and the manufacturing PMI held well above breakeven at 54.7, albeit weaker than December’s 55.2. The Reuters poll had predicted a drop to 54.5.

An index measuring output which feeds into the composite PMI fell to 54.5 from 56.3.

But despite strong demand factories again cut headcount, as they have every month since May 2019. The employment index fell to 48.9 from 49.2.

As immunisation programmes are being ramped up after a slow start in Europe optimism about the coming year remained strong. The composite future output index dipped to 63.6 from December’s near three-year high of 64.5.

“The roll out of vaccines has meanwhile helped sustain a strong degree of confidence about prospects for the year ahead, though the recent rise in virus case numbers has caused some pull-back in optimism,” Williamson said.

(Reporting by Jonathan Cable; Editing by Toby Chopra)

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Business

Volkswagen’s profit halves, but deliveries recovering

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Volkswagen's profit halves, but deliveries recovering 2

BERLIN (Reuters) – Volkswagen reported a nearly 50% drop in its 2020 adjusted operating profit on Friday but said car deliveries had recovered strongly in the fourth quarter, lifting its shares.

The world’s largest carmaker said full-year operating profit, excluding costs related to its diesel emissions scandal, came in at 10 billion euros ($12.2 billion), compared with 19.3 billion in 2019.

Net cash flow at its automotive division was around 6 billion euros and car deliveries picked up towards the end of the year, the German group said in a statement.

“The deliveries to customers of the Volkswagen Group continued to recover strongly in the fourth quarter and even exceeded the deliveries of the third quarter 2020,” it said.

Volkswagen’s shares, which had been down as much as 2%, turned positive and were up 1.5% at 164.32 euros by 1158 GMT.

Sales at the automaker rose 1.7% in December, at a time when new car registrations in Europe dropped nearly 4%, data from the European Automobile Manufacturers’ Association showed.

Like its rivals, Volkswagen is facing several challenges due to the coronavirus pandemic as well as a global shortage of chips needed for production.

It also sees tough competition in developing electrified and self-driving cars. The merger of Fiat Chrysler and Peugeot-owner PSA to create the world’s fourth-biggest automaker Stellantis adds to the pressure.

Volkswagen said on Thursday it missed EU targets on carbon dioxide (CO2) emissions from its passenger car fleet last year and faces a fine of more than 100 million euros.

The group is expected to release detailed 2020 figures on March 16.

($1 = 0.8215 euros)

(Reporting by Kirsti Knolle; Editing by Maria Sheahan and Mark Potter)

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Global chip shortage hits China’s bitcoin mining sector

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Global chip shortage hits China's bitcoin mining sector 3

By Samuel Shen and Alun John

SHANGHAI/HONG KONG (Reuters) – A global chip shortage is choking the production of machines used to “mine” bitcoin, a sector dominated by China, sending prices of the computer equipment soaring as a surge in the cryptocurrency drives demand.

The scramble is pricing out smaller miners and accelerating an industry consolidation that could see deep-pocketed players, many outside China, profit from the bitcoin bull run.

Bitcoin mining is closely watched by traders and users of the world’s largest cryptocurrency, as the amount of bitcoin they make and sell into the market affects its supply and price.

Trading around $32,000 on Friday, bitcoin is down 20% from the record highs it struck two weeks ago but still up some 700% from its March low of $3,850.

“There are not enough chips to support the production of mining rigs,” said Alex Ao, vice president of Innosilicon, a chip designer and major provider of mining equipment.

Bitcoin miners use increasingly powerful, specially-designed computer equipment, or rigs, to verify bitcoin transactions in a process which produces newly minted bitcoins.

Taiwan Semiconductor Manufacturing Co and Samsung Electronics Co, the main producers of specially designed chips used in mining rigs, would also prioritise supplies to sectors such as consumer electronics, whose chip demand is seen as more stable, Ao said.

The global chip shortage is disrupting production across a global array of products, including automobiles, laptops and mobile phones. [L1N2JP2MY]

Mining’s profitability depends on bitcoin’s price, the cost of the electricity used to power the rig, the rig’s efficiency, and how much computing power is needed to mine a bitcoin.

Demand for rigs has boomed as bitcoin prices soared, said Gordon Chen, co-founder of cryptocurrency asset manager and miner GMR.

“When gold prices jump, you need more shovels. When milk prices rise, you want more cows.”

CONSOLIDATION

Lei Tong, managing director of financial services at Babel Finance, which lends to miners, said that “almost all major miners are scouring the market for rigs, and they are willing to pay high prices for second-hand machines.”

“Purchase volumes from North America have been huge, squeezing supply in China,” he said, adding that many miners are placing orders for products that can only be delivered in August and September.

Most of the products of Bitmain, one of the biggest rig makers in China, are sold out, according the company’s website.

A sales manager at Jiangsu Haifanxin Technology, a rig merchant, said prices on the second-hand market have jumped 50% to 60% over the past year, while prices of new equipment more than doubled. High-end, second-hand mining machines were quoted around $5,000.

“It’s natural if you look at how much bitcoin has risen,” said the manager, who identified himself on by his surname Li.

The cryptocurrency surge is affecting who is able to mine.

The increasing cost of investment is eliminating smaller players, said Raymond Yuan, founder of Atlas Mining, which owns one of China’s biggest mining business.

“Institutional investors benefit from both large scale and proficiency in management whereas retail investors who couldn’t keep up will be weeded out,” said Yuan, whose company has invested over $500 million in cryptocurrency mining and plans to keep investing heavily.

Many of the larger players growing their mining operations are based outside of China, often in North America and the Middle East, said Wayne Zhao, chief operating officer of crypto research company TokenInsight.

“China used to have low electricity costs as one core advantage, but as the bitcoin price rises now, that has gone,” he said.

Zhao said that while previously bitcoin mining in China used to account for as much as 80% of the world’s total, it now accounted for around 50%.

(Reporting by Samuel Shen and Alun John; Editing by Vidya Ranganathan and William Mallard)

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