Business & Economics 3 Reasons Why Businesses Fail

There are many factors and reasons leading towards a business venture to fail

. It is most likely for new ventures and brand new business owners. According to common statistics, out of 10 new businesses in the first 5 years, 9 fail and 1 succeed. Out of 10 who pass the 5 year mark, in the next 5 years, 9 more fail and 1 succeed. Here are 3 common reasons why businesses fail.

1. Most businesses fail, for good reason

One thing a potential business owner must understand and know is that whenever a business fail, it is due to good reason. He may be able to get down all the work done, but the main reason why it fails is probably due to the fact that the economic situation is not working in its favor. Reason being that for example, the business itself may be directed too much towards profits and it lacks the basic of tending to the consumers. Or that it bends too much towards the consumers in such a way that it is unable to support itself. Business systems may also cause problems if they are not kept in order.

Business itself may not be easy, but in order to succeed, the owner must understand that good management and business economics must be in check to sustain long term business success. Failure to do so will probably result in the business failing. And that brings us to our first point, which is that ALL business failures fail FOR GOOD REASON.

2. Being Afraid to Fail & Make Mistakes

He who has not failed before will not succeed. In many senses ironically as it may sound, what this statement says is true in most cases. Many people in the current age understand education in terms of reading from a book. However, they lack business education in the practical sense. It is one thing to understand, read and memorize word for word what lecturers and institutions can cram in your head, but another to actually go out and do it.

A lot of determination and patience is needed to make a business work. Not to mention emotional control. The business owner understands that not everyone starts out with extreme intelligence in terms of business education. He therefore fills up his education brain by understanding both in theoretical and practical sense on how to conduct a business.

3. Failure to Rely on Others

In order to make a business work, he must treat his business as a business. Understand that what he is working on is a business and is not a job he has created for himself. In order to truly call himself a successful business owner, he understands that he will be able to leave his business by itself and make it run in auto pilot and come back a year later to see it making more profits than ever before. He understands that if his business will crumble without his presence, he is not a business owner, but rather, a self-employed personnel.

This usually happens when one is unable to leave and trust others to do work for his business. In a sense, the moment the owner does that, it is already the beginning of accepting the fact that the business cannot run without him. In doing so, the business by itself has already failed in the meaning of which one would call a business.

There are many more factors apart from these three; however, most key reasons usually lie upon the reasons as illustrated above. Understand and apply that, and he will be able to accept business failure gracefully and move on.

Towards Your Success,

Aaron Leow

www.aaronleow.com

by: Aaron Leow

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