- No Market Need: 42% of New businesses fail simply because there is no market need for their product/service, or the market is not sufficient. This is why it is vital to conduct a proper market survey when doing your business planning.
2. Run Out Of Cash: 29% of startups fail because they run out of cash. This is either caused by underfunding, reckless spending, poor accounting or expanding too quickly. (Basic Accounting and Finance for Entrepreneurs is a course that will teach Entrepreneurs the basics of book keeping in business. Click to register now)
3. Wrong Team: 23% of startups fail because they could not assemble the right team. A good team has a common vision, expertise and are motivated. (See ENT 109: Building an effective team and principles of team work)
4. Get Out competed: 19% of new businesses close because of competition. A combination of details such as expertise, business strategy, motivation or funding can lead to one startup out competing another.
5. Pricing /Cost Issue: 18% of startup fail because although their product or service is good, the costing is expensive, leading to under performance in sales and revenue.
6. Poor Product/Service: 17% of startups fail because the founders do not focus on the quality of their product/service, but rather on income.
7. No Business Model: 17% of businesses fail because they have no business model from the beginning. There is no business plan or well defined monetization strategy.
8. Poor Marketing: 14% of new businesses fail because the founders still believe that a good product should market itself or use wrong marketing channels or market to the wrong audience. (Marketing For Entrepreneurs is a complete course on marketing. Register now)
9. Ignoring Customers: 14% of startups fail because they do not pay enough attention to their customers.(Mark 105 Customer Relationship Marketing deals extensively with customer relations and how to keep your customers coming back)
10. Loss of Focus: 13% of new businesses fail when their founders lose focus on the primary purpose or idea behind the product or service.
11. Bad Location: 9% of startups fail because of their geographic location. Your location may decide the kinds of talent available to you, your market, availability of finance and other factors
12. Burnout: 8% of businesses fail because their founders simply got tired or had a burnout because of poor work/life balance.
Note: Contrary to popular opinion, 60% of new businesses actually survive their first 2 years in business. Failure is usually as a result of one of the factors listed above. Proper training and preparation greatly increase your odds of success.
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