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What do you think is the major reason for business failure?

There is a particular factor that has become the base of business failure. Knowing this factor and taking the step n this direction sets the business owner and the business miles away from failure and guarantees prolonged business lifespan, in most cases, transcending generations.

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Man/woman sitting on chair in front of his laptop while hands on his head Business is a combination of planning, creativity, funding, and sustainability

Unfortunately, about 75% of businesses fail to hit their target line despite all the strategic planning and right thinking

Even a successful business venture may fail to face the challenges opposed and win at the solid market

It can be due to lack of proper vision, ambiguous mission and business objectives

Thus, starting a business is not a cakewalk; it involves countless strategies, planning, funding, creative and strategic ideas, and an initiative to go after

Additionally, it might involve ups and downs to reach your target and create brand value in the competitive market

However, as an entrepreneur you can assess and avoid them

Report Deborah's answer

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Temitope Deborah (Temi Debs - in my fond words), You hit the score card!

You've given the blue print for business success. From first paragraph to the last are well outlined reasons for business failure and on the other layer - business success.

Thank you for releasing this million dollar worth secret. I'm certain Entrepreneurs here will grab the keys to business success from your answer - especially start ups.

Report Nsemeke's answer

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I appreciate You Jacob🤝thank you

Report Deborah's answer

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Lack of setting definite goal....i.e. short term and long-term goals like the former proper recording of daily transaction and appropriate balance of the account daily while the latter which is long-term goal is verification contract of the business like monitoring of all documents and paper both digital and soft copy for auditing for proper continuation of the business......+2348165123711, qnvivonralch@gmail.com

Report Abdulfatai mojeed's answer

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Abdulfatai, You've given a major factor for business failure. This is a core aspect for monitoring the business' behavior that many growing Entrepreneurs lack knowledge of or know and simply forget.

Your revelation will bring a turn around for businesses and business owners that will add this aspect to their business management strategy.

Report Nsemeke's answer

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Lack of consistency is the major reason for business failure

Report Benedict's answer

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In working with many clients in 65 countries here at MicroMentor over the last decade, I have found no single reason for failure of a small enterprise. What I have found are 10 common categories of mistakes that contribute in large measure to small business failures. They are listed below. Mitigating the risk involved in each reduces the probability of failure.

** Promising what they cannot deliver

** Overextending resources and getting a reputation for poor performance.

** Telling the customer what he or she wants to hear instead of what they need to know.

** Not knowing the value of networking constantly on professional sites such as this one and accumulating an "Expert" rating from peers

** Not understanding the value of blogging. A blog is quite different than a web site. Provide good, solid information free of charge and use blog searches for synergistic businesses to team with. Teaming is an absolute necessity these days.

** Lack of preparation to provide information, samples and valuable service gratis as a marketing tool; introducing oneself and then immediately engaging the client with presentation tools available to bring expertise to whatever topic they are interested in.

** Quoting and billing what the client cannot afford and not growing with him (in content and resources).

** No dedication to working oneself out of a job with a specific customer and having the client take over by training him, thereby having him remember you and recommend you to 10 others.

** Not remembering that growth is a function of persistence and foresight. Know where your market is headed and get their first - then write and speak about your success indirectly by helping others. Demonstrate humility and a satisfaction in helping others succeed. They will find ways to give you credit. There are ways of tooting your horn without making peoples' lights go out.

** Not keeping in mind that word of mouth advertising from pleased clients is a sure ticket to success.

Report Kenneth's answer

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I have helped over 7 businesses to scale profitably over the last 12 years across India, and Africa. Working closely with entrepreneurs I have summarised the following reasons for failure - lack of frugal mindset in entrepreneurs - lack of execution roadmap for their products and services - too much of attachment with their product and services often leading to blindness even when things are not going right - too much energy to do many things at the same time. Lack of planning to prioritise things for themselves and others - lack of trust in others, including their co founders - high need for power and recognition. Its a fatal combination - not able to find someone who can question them, challenge them without fear - getting easily swayed by too many advice, with no-one to filter and help them in picking the right advice. - not letting go :) Hope this helps!!

Report Indresh's answer

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From my personal experience of over 10 years working with people from different industries and countries, the reasons differs and sometimes, what one considers a problem to quit or made the business to fail, some have managed to overcome and scale.

Some of the reasons below for business failure often revolves around inadequate market understanding (assumption is very costly), insufficient financial management (managing your finances), and the inability to adapt to changing market dynamics.

Lack of Market Understanding: Businesses may fail if they don't thoroughly understand their target market. This includes misreading customer needs, not identifying competitors accurately, or failing to adjust strategies based on market feedback.

Financial Mismanagement: Poor financial planning, misallocation of resources, and inadequate cash flow management can lead to significant challenges. Businesses need to control costs, manage debts, and allocate resources wisely to sustain operations.

Inability to Adapt: Markets are dynamic, and businesses that can't adapt to changing conditions may struggle. This could involve technology changes, shifts in consumer behavior, or responding to economic fluctuations. Inadequate Marketing: Even with a great product or service, if a business fails to effectively market itself, reaching and retaining customers becomes difficult.

Understanding these factors and taking proactive measures can significantly improve a business's chances of success.

I will like to add that, you don't have to cross all the "T" and "i", failing is also a part of how you succeed in business. Some people quit too soon.

Report Oscar's answer

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