Nobody starts a business expecting it to fail but so many who start are ill-prepared for what it takes to run a successful business.
Here are a few reasons why businesses fail
No experience running a business or no experience in the business’ industry.
So many people want to open restaurants because it’s their dream, but many don’t have the experience or they’ve only played one small part of the business. They might be great cooks or chefs, but that’s one of many skills required to run a successful business.
No grit. A business is hard and will have a lot of downs before and even after it has a few ups.
The people involved in it must be able to have the fortitude to endure the hard times and push through. Many who have had day jobs going into a business don’t realize because they never had to worry about the company they worked for other than the small piece they were responsible for.
Not profitable, lack of sales:
A business can only last so long with outside funding or no funding. At some point, a business needs to be making money, and it needs to make more money than it costs. Depending on the sales cycle, there need to be enough cash reserves to account for that.
Wrong location / market.
Most businesses are still geographically constrained. Even though our business can technically serve clients anywhere, many clients still prefer proximity and want us to be close to them. Picking the wrong location for your product/service can be detrimental to your business. This is why companies like KFC or Chicken republic do a lot of research before picking a location or going into a new market. Even then, they don’t always get it right.
Bad / lack of marketing or sales.
Just because you offer a good product or service doesn’t mean people know about it. One aspect of a good business is having either good marketing or sales. You can do alright with just one, but without either, your business must have a really strong word of mouth referrals.
Do you know of any other reason?
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