Top Reasons Why Entrepreneurs Fail
Every year thousands of businesses fail.
Every year thousands of businesses launch. Every year thousands of businesses fail. In fact, business experts say
that one in five businesses will fail within just a few years of launch. The actual numbers are probably quite a
lot higher. You don’t want to fail. You want to succeed. When you know why entrepreneurs fail, you can properly
prepare for success. Here are the top reasons why entrepreneurs fail.
#1 Lack of research - It’s vitally important to make sure there’s a market for your business
before you launch. You have to research both demand and supply. Who is providing the same products or service? What
problem are you solving for people? Who are your prospects?
The research phase of launching a business is one of the most critical. Without proper research into supply and
demand, you’re not going to be able to position your business successfully. Very few businesses succeed without
solid initial research.
If you’re unsure how to research your business idea, talk to an expert. Get help. Speak to other entrepreneurs you
trust. You don’t have to share your idea with others, but rather learn how to research your idea.
#2 They don’t understand their market - This also relates to research but it’s a different kind of
research. Before you launch your business, it’s vital that you know exactly who you’re marketing to. Why? Because
you need to position your product or service to meet their needs. If you don’t understand their needs, you may miss
out on profits.
#3 They don’t understand cash flow - Cash flow is essential to survival. Actually, poor cash
management is perhaps the most common reason for business failure. Entrepreneurs must create a budget. They have to
be realistic about how much they expect to earn. And they must have a tight rein on their expenses. In order to pay
the bills, you need to have cash coming in on a regular basis. Cash flow is essential to survival.
#4 An inability to market - Not everyone is a marketing genius. It’s important to realize that
marketing is essential to success. If you don’t have a solid marketing plan, your business will not thrive. In
business, the old “if you build it they will come” mentality just doesn’t work. If you don’t like or understand
marketing, then hire someone who does.
#5 No business plan - Many people believe that a business plan is only necessary if you’re seeking
funding. This is not true. In order to achieve your goals, it’s important to plan how you’re going to succeed. Your
business plan is your road map to success. Don’t skip this important step.
Take heart and think positively. While one in five businesses fail, the others succeed. Research, plan, and
understand your market. Commit to marketing and manage your accounts with solid accounting and cash flow
management. You’re destined for success!