Why do businesses fail?

There are a thousand expressions that talk about working hard yielding rewards. Unfortunately, many people in the business world will dispute this philosophy. Hard work is certainly admirable and brings results, but it is not the only ingredient required to ensure business success. 

Business fail because of a myriad of reasons. The simplest being that there is no demand or perceived need for your product. Sometimes we come up with a brilliant idea but it is either just before the wave of popularity strikes, or as brilliant as the idea is, there is no perceived value in the market – meaning that people don’t think they need it – even if they really do! Competition, substitutes, and pricing are also factors which impact on the success of a business.

Looking internally, business success depends equally on people and processes. Both the people in the business, and the processes running the business, need to be competent. If the people are not in the right positions, or if the systems and processes are not effective, the business will ultimately collapse.

It is most important to realise that business failure is not a personal failure. It is simply feedback from the market to tell you that something in your business needs to be changed.

This is the only way a business person can grow and mature their business when they do not succeed. In the words of Ron Holland:

“Failure can either be a stepping stone to success, or a stumbling block to defeat.”

Don’t ever let business failure defeat you!