The Top Reasons Businesses Fail: More than 230 companies have filed for bankruptcy so far this year. Did you know that 80% of businesses fail within the first five years of trading? One business is going bust every hour. These statistics are staggeringly high, and even those that succeed, the 20%, often are just about keeping their head above water.
In a recent video, I did a deep dive into the 5 reasons why most businesses fail. You can watch the full video at the top of the page. In this article, I will summarise these 5 reasons!
The Top Reasons Businesses Fail: 1. Trying To Be Too Unique
The first reason is that people are trying to be too unique, and too different, instead of thinking about what the market actually wants and needs. You hear a lot of people talk about your unique selling point, or USP, in business. The definition of the word unique is that there's only one like it in the world. How arrogant to think that you could have a business that is truly 100% unique!
A lot of people are looking for the gap in the market, trying to do something that no one's ever done before. But let me ask you a question: when Steve Jobs came up with Apple, were there already computers? Yes, there were already a lot of computers! So, rather than trying to find something brand new, it's better to find something that's already working and then do it better.
The Top Reasons Businesses Fail: 2. They Can’t Explain What They Do
The second reason people fail in business is because they can't articulate what they actually do. No one knows how they're making money or how their services are going to benefit anybody. There are so many people I meet at property networking events and business networking events, and I'll say, “What does your business do?” Even when they tell me, I'm still confused; I'm lost.
You need to be able to explain your business so that a child can understand. In fact, Airbnb, when they first started, were really struggling because people didn't understand how it worked. Investors weren't investing in it, and consumers weren't using it. It was only when they really delved into how they could articulate their message that they suddenly blew up and now is a household name.
The Top Reasons Businesses Fail: 3. They Are Terrible At Recruitment
The next reason that most businesses fail is because they're terrible at recruitment. If you're in business, you need to see yourself as a recruitment agency. I learned this from Steven Bartley in the book “The Diary of a CEO,” where he talks about the importance of hiring good people around you.
I see so many struggling, failing businesses because they think they need to be the one to do everything: the sales, the marketing, the bookkeeping, the finance, the admin, the operations. Sometimes you can get in your own way by being arrogant and thinking you need to do everything yourself. No, you don't. What you need to do is hire well!
The Top Reasons Businesses Fail: 4. They Don’t Listen To Their Customers
The next reason businesses fail is because they don't listen to their customers. They see their customers as people who pay money, transactional. But you need to obsess over your customers and really listen to what they actually want.
An example of this is Coke. Coca-Cola had a brilliant brand, and everybody was loving Coke. Then Pepsi came along. They did a test and got loads of people in the streets to drink Coca-Cola and then drink Pepsi. They asked, “Which one tastes better?” Nationwide, more people preferred the taste of Pepsi over Coca-Cola.
Coca-Cola felt threatened by that, of course. So, what they did was they created a new version of Coke that they believed would be sweeter and nicer than old Coke. In a blind test, New Coke was better than Pepsi and better than old Coke. They rolled out this New Coke, but no one wanted it. The Coca-Cola customers just wanted the normal Coca-Cola they were used to drinking. Eventually, they went back to the original Coca-Cola!
Don't get so distracted by your competitors or your clever thinking and analysis. Listen to what your actual customers want.
The Top Reasons Businesses Fail: 5. They Don't Ask For Help
The number one reason I think people fail in business is because they don't ask for help. If you have a problem in business, rather than trying to figure it all out on your own, find someone who has been through it, and ask for help.
We're so proud sometimes that we just don't say, “Hey, I'm really struggling with this. How can I be helped?” When I've learned the most in my business is when I'm struggling, and I'm just open and honest about it. Then I find someone more experienced than I am and say, “I've got this problem and I don't know what to do. What would you do in my situation?”
The most successful business people are the ones that learn from other people's mistakes. That's why I have so many mentors and read so many books.
From The Top Reasons Businesses Fail To The Top Ways To Succeed In Property
If you learnt a lot from this list of the top reasons businesses fail, why not continue your education? Join me at my next £1 property training event!
On the course, you will learn how to:
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Become a property investor using other people’s money so that you can get started straight away
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Utilise the 5 different types of raised finance so that you know exactly what to offer and when
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Find the perfect properties for the BRR strategy
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Recycle your money so that you can ‘rinse and repeat’
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Build a power team you can trust, so that you can save time and money
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And much more!
Tickets are only £1, and you can get yours here. If you are ready to take action, I hope to see you very soon!
