Reasons Why Entrepreneurs Fail

No one said running a business is easy and I won’t be the first. It is truly hard work but the silver lining is that it is rewarding. Since running a business can be quite challenging, not all businesses are able to maintain and stay open.

In fact, according to the Small Business Administration (SBA) "two-thirds of businesses with employees survive at least 2 years and about half survive at least 5 years. Only about half of small businesses survive passed the five-year mark, ranging from 45.4% to 51% depending on the year the business was started. Beyond that, only about one in three small businesses get to the 10-year mark and live to tell the tale.”

Failure is something entrepreneurs try to stay far away from. However, it’s not the enemy of the entrepreneur, it’s actually the teacher. Instead of being consumed with failing, an entrepreneur must be cognizant of what could cause failure in their business or industry and create a plan for how to deal with that issue.

Listed below are things to avoid or address to prevent or recover from failure:

1. Assess the market

42% of businesses fail because there is no market for their product/service. It is vital to talk with prospective customers to find out if they want what your business offers. Once that is determined you also want to make sure they are willing to pay your fee for this product/service.

2. Build a successful team

Most successful entrepreneurs surround themselves with amazing talent. Steve Jobs stated "You’ve got to be a really good talent scout because no matter how smart you are, you need a team of great people. You’ve got to figure out how to size people up fairly quickly, make decisions without knowing people too well and hire them and see how you do, and refine your intuition . . . because you need great people around you.” When deciding your team make sure you are very intentional and your build with purpose in mind. Those you recruit will be responsible for helping you get to that purpose.

3. Differentiated/Distinct product

When deciding your products and services you have to make sure they are distinct. Remember there are competitors out there who have already set the bar high, so if you plan on releasing a similar product you will need to rise to the level of your competition. However, if you are providing or creating a product/service that is differentiated, it needs to be able to shine on it’s own and offer a benefit to the consumer for success.

4. Tech, Tech, Tech

If your business is based on technology access, you want to make sure the technology you choose it is right and will support your business. Many entrepreneurs get this step wrong because technology can be quite expensive. However, technology can assist with automating a lot of processes involving your clientele. You must have a willingness to analyze problems and determine how to improve.

5. Finances

It costs money to run a business. So, if you don’t have money it can fail. There are a lot of things you can learn to do to avoid some expenses (accounting/bookkeeping, graphic design, etc). However, skills you need but don’t have can simply be answered by on-boarding subcontractors. Some require a salary but there are some who will offer per-diem or per-hour fees. There are always ways to smartly finance the services you need to offer within your business for success.

These are just the top 5 reasons businesses fail. There are many others such as lack of organization, procrastination, and lack of integrity. Whatever the reason may be, it is ideal to be fully aware of the needs of your business and your capability to fulfill those needs.

If you are unable to, it will be best to consider additional training (I love YouTube University) or bring in a sub-contractor who can offer you the services as an affordable rate. Let’s rock in 2022 and do everything necessary to build your empire!