These are the top 10 reasons why new businesses often fail:

These are the top 10 reasons why new businesses often fail:

Demand of Product or Service

Many businesses fail because there is no real demand for their product or service in their area.

Business Plan to Know your Goals 

Without a clear business plan, it’s challenging to set goals and measure progress.  It’s great to want to open a business but you need to set realistic goals to know if you are on the right path.

Under Capitalized 

Running out of money is the number one reason why businesses fail within the first year.  You need to overestimate the amount of money you will need to give your business a chance to succeed.

Poor Financial Management

Mismanaging finances, not keeping track of expenses and revenues, can lead to failure.

A Marketing Plan

Not reaching the target audience or failing to communicate the value of the product will lead to low sales.  A business with no sign is a sign of no business.

Knowing your Customer’s Needs 

Failing to adapt to customer feedback or changes in the market can result in losing customers.  What do your customers want and are you delivering what you want or what they are asking for?

Rapid Growth  

Growing too quickly without the necessary infrastructure and or staff can strain resources and lead to operational issues.

Lacking Leadership

Poor management and leadership in place can demoralize and demotivate your staff.  Your customers can spend their money at any one of your competitors, do not give them a reason to shop somewhere else.

Stiff Competition 

Not differentiating from competitors or failing to innovate can make it hard to survive.  If you are going to be the second pizzeria on the block, what will make people buy your product?

Regulatory Challenges

Navigating complex regulations and compliances, either imposed by the state of federal government can be overwhelming for new businesses. 

Knowing these common pitfalls can help you better prepare you in your new business adventure.    

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