Nobody starts a business expecting – or wanting – to fail. Every single entrepreneur goes into it full of steam and vigor, wanting desperately to succeed. But, so many of them don’t, and the question is – why? Are there essential reasons why some new businesses succeed, while others fail? Here is what research on the subject has found:
Why Some Businesses Fail
- Entrepreneurs take advice from people that they shouldn’t (not in the business or industry, no real experience, etc.)
- The entrepreneur lacks focus.
- The entrepreneur doesn’t have a good mentor.
- There is no real passion, motivation, or commitment on the entrepreneur’s part.
- Too much money is raised too quickly.
- General lack of knowledge in operations, marketing, and finances.
- The product is poorly researched and poorly executed.
- There isn’t a market need for the particular service or product.
- Too much competition in the industry.
- No real business model for the product or service.
- Customers are not valued enough.
- Marketing is subpar.
- The price of the product or service is too high.
Why Some Businesses Succeed
- The team is committed to staying the course, and sticks with the pre-determined path.
- Leaders of the company have general and industry-specific knowledge.
- Founders want to see a “change” – and are committed to getting it.
- The leaders know how to formulate healthy and productive mentor relationships.
- The team learns, listens, and observes everything in their business and in the industry in general.
- The team has superior persistence and patience.
- Leaders adjust when necessary – but not continually.
- Just enough money is raised to take the business to the next level.
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