Why do 80 percent of all new ventures fail within the first five years?
The biggest reason is lack of proper financing. It is human nature to underestimate the amount of money that will be needed to start up and run a business. They also fail for other human reasons —the entrepreneur becomes isolated, people find that they don’t like the business they have chosen (say, a franchise cleaning company), they find the time commitment too onerous, and, in the other direction, they are not working steady hours or paying careful attention to sales, finances, and customer service. Businesses fail because there is too much competition or when the owner has not done a careful and objective analysis in writing a business plan. Growing too quickly can be a real problem. Neither money nor management can keep up. Business partners have a falling out, because either they do not get along personally or they have a disagreement about the direction of the business.
What kind of pitfalls have you encountered?
Photo by Steve Johnson