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Top 7 Reasons Why Businesses Fail

By May 18, 2021March 22nd, 2022No Comments

According to the U.S. Bureau of Labor Statistics, approximately 20% of new businesses fail during their first two years of being open, 45% fail during their first five years, and 65% fail during their first 10 years. That means only 25% of new businesses make it to 15 years or more. In this blog, we’re going to uncover why that happens.

As an entrepreneur who’s passionate about helping other people grow their businesses, I’ve put together a list of lessons that I’ve learned over the years. Fair warning, this article isn’t for you if you are just looking for motivational words and inspirational feelings. This is for you if you are serious about scaling your business and you are ready to dig into some hard work!

Let’s get started.

Lesson #1: It’s Not Going to be Easy

Okay, let’s be honest here…it’s hard to build a profitable business! Anybody who tells you that you can build a successful business easily is lying to you. It’s never EASY. If it was, then everyone would be billionaires with successful businesses. Now I’m not saying that it’s not simple – if you use a proven framework to build your business, it’s a lot simpler than just trying random methods over and over again – but it’s not easy because you have to put in the work.  The good news? You can do it, you just have to have the drive and be willing to put in work. If that sounds like you, you’re on a good path.

Lesson #2: You’re Going to Be Uncomfortable

Being comfortable with discomfort is pretty much a prerequisite to being a business leader! When you’re constantly evolving, adapting, changing, and leveling up your skills and your mindset, you have to be able to be uncomfortable. For example, you might be a sales pro and really enjoy sales, but it may come to the point where you need to hire a team of salespeople and train them to sell like you!  If you can laser-focus on your bottom line and be ready to be uncomfortable, you’ll be able to handle any challenge thrown at you…and trust me, there will be challenges. But that’s part of the fun of owning a business!

Lesson #3: Time is Your Most Valuable Asset

Time and time again, I see leaders make the mistake of not treating time as their most valuable asset. It’s essential that you know where you add the most value to your business. You only have a certain amount of hours a day and your time is precious. Take that sales example from Lesson #2, for example. Even if you’re a rockstar at sales, as your business grows, you can’t be doing all of the selling and all of the other additional responsibilities that come with growth. You have to be able to figure out where your time adds the most value to your growth. So, focus on things that will move the needle forward and add profit to your bottom line.

Lesson #4: Delegation is Key

Many people want to be business owners but they don’t know how to be good leaders. The difference? Owners try to take control of everything and do everything themselves, while leaders understand how to find the right people. If you want to grow a profitable business, don’t try to do everything yourself — because you won’t be able to. Remember, your time is limited. So, find great people and hire them to work with you, you’ll be able to grow and scale much faster when you do.

Lesson #5: Streamlining Your Processes is Necessary

Processes matter. It’s easy to jump right into doing things and complete tasks every day, but it’s hard to take the time to build your strategy and put processes into place that are automated and are going to help you grow. Especially when you’re so busy yourself, you might tend to put those things off. I’ll be the first to tell you that it is a necessity to implement streamlined processes across the board with automation in the right places.   So, take a look at the processes you currently have in place and figure out what works and what doesn’t. Keep the ones that work and improve upon the ones that don’t. If you fail to do this, your business is going to become stagnant, and you definitely don’t want that to happen.

Lesson #6: Know When You’ve Plateaued 

Every business plateaus at some point, and most people simply don’t know what to do next to stop the stagnation and start growing again! When you hit your plateau, you should review all of your processes, financials, and team performance. Take that plateau as an opportunity to shift and pivot where you need to in order to scale to the next level.

If you’re at that plateau right now, you’re probably thinking, “If I knew what to do to stop being stuck, I would do it…” It’s hard to move forward when you feel stuck. If your website is stagnant and you want to turn it into a sales-capturing too, check out the EvolveU 6 Figure Freelancer.

Lesson #7: Don’t Be Afraid to Make Hard Decisions

To end up in that top 25% of businesses that succeed long-term, you have to make hard decisions. Some businesses grow to a certain point and start to decline because the leaders aren’t willing to make hard decisions. It’s not fun to let an employee go, stop working with a particular customer, or revamp your products. But if you want to succeed in growing a profitable business, you have to make those hard decisions!

So there you have it!

The seven lessons I’ve learned on why most businesses fail. Now, I’m curious: Which one do you find yourself struggling the most with?

Drop a message in the comments below to let me know.

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