In the real world, Business failure is a harsh reality.
According to a stat by fundera.com, 20% of small businesses fail in their first year, 30% of small businesses fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business.
While 80 percent will make it past that first-year mark, the rate begins to drop off substantially each year thereafter. Only about two-thirds of all businesses with employees are able to survive their second year. The fifth-year? Just half. Ten years out? Just 30 percent. That means that seven out of 10 businesses will fail within the 10-year mark.
For the businesses that survive failure, the majority of them struggle for many years, just holding on for dear life. This is particularly true for small businesses.
As entrepreneurs, we hardly look at these stats when we want to start a business. We get the business idea and we jump right into action. We deal with the business issues as they come up and when we can’t, we become just another statistic.
So, why do most businesses fail?
If you’re an entrepreneur, you’re passionate about your business. And with so much demand on your time as a business owner, it’s easy to be caught off guard.
If you’re not prepared to deal with the ever-growing challenges of running a business, you could easily find yourself on the streets of failure.
If you want to avoid business failure, there are definitely some things you should be doing, and other things that you shouldn’t be doing.
From my experience running my own business and working with many business owners, here are the top 5 mistakes business makes that eventually lead to business failure. Do your best to ensure that you address these before they address you.
Mistake # 1: Failure to focus on a niche market
When we started our accounting business, we did not know at a deep level who we wanted to serve. We…