Let’s start with a hard truth: most businesses don’t make it.
In fact, if businesses were contestants on “The Apprentice”, the majority would be told “You’re fired!” before the coffee’s even cold. But why do so many promising ventures end up as cautionary tales? And how can you avoid joining their ranks?
Here’s a (not entirely depressing) look at some of the classic reasons businesses go belly up.
1. No One Wants What You’re Selling (Except You)
You might think your beetroot-infused kombucha is revolutionary, but if the general public prefers a cup of builder’s tea, you may be in for a rough ride. Businesses often fall in love with their idea and forget to ask the crucial question: Does anyone actually want this?
Tip: Do your homework. Market research is not just something you pretend to understand in pitch meetings. Ask real people, not just your mum/partner or FB friends because they will more than likely not want to say anything to hurt you. That’s why it’s really important to get networking and speak to others in business.
2. Cash Flow Crisis (aka The Money’s Run Out)
You can have the best idea in the world, but if you’re constantly robbing Peter to pay Paul (and Paul’s now charging interest), it won’t be long before you’re writing your business obituary.
Tip: Cash is king. Know where every penny is going and coming from. And remember: turnover is vanity, profit is sanity, and cash flow is reality.
3. Trying to Be All Things to All People
One day you’re a tech consultancy, the next you’re selling eco-friendly tote bags and moonlighting as a mindfulness coach. Businesses fail when they lose focus and chase every shiny new trend like a Jack Russell on Red Bull.
Tip: Know your niche. Then double down on it. You’re not Amazon. Yet…
4. Terrible Leadership (Yes, We’re Talking About You)
Let’s not sugar-coat it: bad leadership sinks ships. If you’re indecisive, disorganised, or treat your team like Victorian chimney sweeps, it won’t end well.
Tip: Lead with clarity, humility, and the occasional biscuit. People will follow those who make sense and occasionally bring Hobnobs to meetings-the dark chocolate ones hopefully!
5. Marketing? Never Heard of It
Having a brilliant product or service and no marketing is like throwing a party and forgetting to send invitations.
Just because you built it doesn’t mean they’ll come.
Be very careful not to blow your budget on that social media “expert” in your network group. Remember that a good website will ensure you stand out.
Tip: Invest in visibility. That doesn’t mean plastering your logo on the side of a blimp, but it does mean understanding your audience and how to reach them.
6. Ignoring the Numbers
If you treat your accounts like a haunted attic, never opened and vaguely terrifying, you’re asking for trouble. Businesses that don’t understand their numbers are usually surprised when they run out of money, customers, or both.
Tip: Get comfortable with your financials. Or, at the very least, hire someone who is and listen to them (even if they use spreadsheets are better than Sleeping tablets).
7. Stubbornness in the Face of Reality
There’s something noble about perseverance, but also something slightly mad about sticking with a doomed plan. Some businesses fail because the captain would rather sink with the ship than change course.
Tip: Pivot is not a dirty word. Adapt. Evolve. Even Nokia made tyres before it made phones. And then… well, we all know what happened there.
So…
Failure is part of the entrepreneurial landscape, but several of the causes are avoidable. With a bit of self-awareness, a splash of realism, and a good deal of planning, you can give your business a fighting chance.
Need to speak to someone? Do reach out to us here.
Photo by Chuttersnap
