Reasons Businesses Fail
Reasons for business failure.
The reality is that there is no single magic ingredient for success, and there are no magic spells to prevent failure either. If your business is suffering and you don’t know why, read some of the following reasons.
The list below is exhaustive, but it does highlight some of the common attributes or behaviours that can lead to business failure.
Commercial
Underestimated capital expenses
Underestimated resources
Lack of product or service uniqueness
Management issues
Lack of, or poor, marketing and advertising
Poor business planning
High competition, low sales or no competitive advantage
Lack of business plan / No SWOT analysis
Sporadic or unpredictable opening times
Unexpected growth
No use of, or outdated technology
Poor location
No creativity and innovation
No market demand
Personal
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Fatigue or ‘burned out’
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Giving up too soon
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Reacting instead of initiating
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Fear of failing
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Fear of succeeding
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Lack of urgency
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Not knowing what you want
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No desire to learn
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Lack of experience
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No flexibility
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Lack of vision and prediction
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Lack of experience
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Procrastination
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Doing nothing at all
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Fallen ‘out of love’ with the business
Financial
Lack of income/revenue
No financial buffer
Over or Under investment
Too cheap/poor pricing
Lack of financial analysis and review
Experiential
Low customer satisfaction
No new or repeat customers
Negative customer experience
Inattentiveness
Lashing out at customers
If you’ve looked at the above list and you’ve decided that none of the above apply to you, consider getting a second opinion. Sometimes a business owner can be too close to the problem to see it clearly … consider being unable to see the wood for the trees. Ask your business partner, manager, trusted employee – or anyone who you know will offer the cold hard truth.
If your business if failing, at this point there is no benefit in fooling yourself or asking someone you know will try to make you feel better.
