Why Do The Majority of Business Start Ups Fail?

This question has been debated by CEOs, MBAs, owners and entrepreneurs ad infinitum…

In fact if you search Google, there are over 165,000,000 Million results for this search phrase alone. You’ll find everything from in­depth articles from authority sites like Entrepreneur.com, Forbes, BusinessKnowHow and others listing the multitude of reasons business startups fail.

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Some of the more common reasons businesses fail are...

Market Problems Business Model Failure Poor Management Team Running out of cash Product Problems Single founder Bad location Marginal Niche Derivative Idea ­ imitations of an existing company Obstinacy Slow launching Launching Too Early Having no specific user in mind Raising too little money Spending too much Raising too much money and lots of others...

I could go on, but I think you get the idea.

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After 15 years of consulting with all types of start up companies, our team has narrowed down the reasons that the majority of startups fail down to just 3. Knowing why a thing does not work is often a major step to building something that does work. In the end, for 90% of startup companies, failure comes as a result of; not knowing what to do, when to do it and how to do it. Sounds simple right? But wait a minute. Think about it. You may have a great idea or concept for a product or service, but moving from the idea stage to the launching of a business is most often filled with lots of steps. Many of these steps to getting your business up and running are confusing, expensive and time consuming.

Should your first step be to create your business plan? Should your first step be to find a location? Or should you begin by setting up your legal structure? Maybe you should create your product first. How about securing the funding to get the business started?

Not Knowing What To Do… Recently we met with a client who even though he didn’t have any money or a product, he wanted our help in finding office space. Sounds strange, but it is not atypical. Then there are those folks who come to us with a full­blown business plan; complete with charts and tables, but when we ask them to explain to use what their business does, they cannot. These people spent time and money having a business plan created about an idea without having fully vetted or understood the undertaking. What do you think their business plan is worth? Finally, we interview with individuals who have manufactured a product without having done proper market research; only to find out that there is NO market for the product. Having wasted time and money, they are now frustrated, often to the point of giving up. These are just a few examples of the results of not knowing ‘What to Do’. Before you open the doors to your business, save yourself countless hours — and the possible headache of making a huge foundational mistake — by getting these 3 things (what to do, when to do it and how to do it) straight before you start up.

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In our 5 Step Business StartTM System we begin by teaching you ‘What to Do’... Beginning with ‘Define It’, 5 Step Business StartTM walks your through the process from Business Idea to Business Launch in an easy to follow sequence of actionable steps. Each of the modules (1­5) builds on the step before it, in a logical progression. The goal is for YOU to understand YOUR business and what to do to make it successful. In our next installment, we’ll examine point #2 ­ When to do it!

Go here to learn more about 5 Step Business StartTM

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