Reasons Why Businesses Fail – Avoid These 3 COSTLY Mistakes!

What are the reasons why businesses fail? That's a big, big question. I mean, after all, when we look at the stats, something like 90% of businesses fail. What's the reason why businesses fail? And much more importantly, what can you do to avoid becoming a statistic?! Here, we're gonna dig into all this so that you can avoid some of the biggest reasons why businesses fail.

Show Notes

Okay here's the first, and maybe the biggest reason why businesses fail: They get into business for all the wrong reasons!

A lot of people get into business for THEMSELVES...to be own boss, to live a life of freedom, to get rich...and all sorts of other self-centered reasons.

In fact, in my research, I discovered that the number one reason for business failure is following a dream...but with no existing market to support it.

I mean really, think about this for a second: Whenever you're in the role of "customer" -- you know, when you're thinking of buying another business's product or service...

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...how would it feel to know that the owner of the business you were thinking of buying from didn't care about you, your questions about his product, or the problem you're trying to solve with his product?

How would it feel to know that the business owner was only in it for himself...cuz he wanted to "get rich" or whatever?

Doesn't feel very good, does it?

In fact, if we knew that the business that we were thinking of buying from didn't care about us at all...then we'd be downright insulted wouldn't we?

We'd say, "screw this guy!" and go somewhere else, wouldn't we?

Well guess what?

Your customers and the audience you seek to serve are EXACTLY the same.

See, your customers and the people in the market you serve aren't faceless automatons or robots or numbers on a spreadsheet...

...they're living, breathing human beings with struggles, problems, and frustrations.

So the biggest reason for people failing in business is exactly this -- the business owner serves their own needs first and not the needs of their customers.

Do you need the message to be more blunt? Then here it is...

Nobody cares. Nobody cares that you want to get rich. Nobody cares that you've wanted a Lamborghini since you were eight.

Nobody cares that you worked hard to develop your product for ten months straight or that you're behind on your bills and desperately need sales.

Nobody cares...not because they're heartless...no, nobody cares because everyone's wrapped up in their own problems...

...just like you're wrapped up in yours.

Business owners who can put their own problems and challenges and needs aside...and focus instead on serving their customers suddenly find that their problems and challenges miraculously go away.

Okay now, here's another reason why businesses fail: Essentially, it boils down to product / market fit.

In other words, nobody wants what the business is trying to sell.

See, here's what nearly all new business owners do: They come up with what I call a "magical big idea"...

...that is, a unique "never been done before" idea for a product or service that they're sure is going to make them millions.

Next, they spend months and months and months developing their "magical big idea" into an absolutely perfect product...

...and when they finally muster up enough guts to launch it and start selling...

...they get crickets.

Nothing! Nobody's interested!

Now if this is you -- if you've experienced this before -- don't feel bad. Really, this is almost like a rite of passage that every successful entrepreneur goes though (some more than others!)

And when this happens, most newbie business owners quit in frustration. After all, it's all the market's fault that they failed, isn't it?

No, it isn't!

See, other newbie business owners -- after going through an experience like this -- learn the lesson.

They realize that it's not the market's fault that they failed. Instead, it's THEIR fault that they failed...

...they didn't offer something that the market wants. The market gets to decide what's valuable and what isn't, not us.

So what we need to do is find out what the market wants to spend money on...and then build it for them.

Otherwise, we're doomed to failure.

Okay, here's a third and final reason why most businesses fail...and actually, it relates to something you and I touched on earlier...

...and that is, quitting too soon.

In other words, failing at things, have things not work out, and then quitting in frustration way too soon.

Quitting GUARANTEES you've lost. If you haven't quit, it means you're still in the game...that you're still trying to get it right.

But a lot of times, people just can't hang in there. And so, they quit and lock in their loss.

My research shows it takes an average of 2.5 years for a business to gain traction.

That's 30 months.

Now imagine someone getting frustrated and quitting after 15 months? Like, they just can't hang on any longer and they quit in frustration...but they were halfway there!

Or worse, imagine someone quitting after 20 months...or after 29 months!

One of the biggest challenges in business is, you and I and everyone else simply doesn't know how long it'll take before the business starts cashflowing and providing a full-time income.

It could be less than 30 months...or it might be more. We simply don't know. It's gonna take as long as it's gonna take.

But a lot of people getting into business think it should be easy to win...rather than recognizing that it's a long-term thing.

And so, they quit...and lock in their loss.

This is why I'm such a huge advocate for NOT quitting your day job.

Starting a business won't instantly replace your income any more than planting vegetables in your backyard garden will immediately replace your grocery bill.

It takes time to grow vegetables...and it takes time to grow your business, too.

So keep your job, run your business in the meantime, and wait for it to grow...and don't quit!

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Geoff Blake, Ten Ton Online

Hey there, I’m Geoff! Business, marketing, and the web can seem like a tangled, confusing mess, right? Well if you wanna get clear, straight info on all this stuff (no gimmicks or hypey nonsense)...then you're definitely in the right spot! Start here (free!)