Are you an entrepreneur who is afraid of failure? Have you started any business in the past but failed badly without knowing why?

Well, you are about to find out what went wrong.

Entrepreneurship is never a hurdle-free venture, and unless entrepreneurs are constantly on top of their game, the chances of failure are very high. 

According to research, less than 10% of all new ventures survive their second year, and entrepreneurs frequently end up on the wrong side of success.

It can be a lot of joy and fun to start a business. But let’s be honest, nobody starts a business to fail. Still, success necessitates careful planning and the proper start-up of the company.

Entrepreneurship is more accessible if you get your business off to a good start.

The most terrible part about failure is that the entrepreneur is usually unaware of what is going on until it is too late for them to take action.

It makes sense because if the entrepreneur had truly understood what they were doing wrong, they might have saved the company.

So in light of the aforementioned, here is a list of reasons why most entrepreneurs fail at the beginning of their ventures:

  1. Failing to lead

Your business can fail if you demonstrate poor management skills, which can manifest in various ways.

Suppose you don’t have enough experience in making management decisions, monitoring a staff, or having the vision to lead your organization. In that case, you’ll struggle as an entrepreneur.

Apart from that, when problems that necessitate strong leadership arise, you may be hesitant to take charge and resolve the issues while your business continues to fail.

Safe to say, dysfunctional leadership will affect every aspect of your journey, from financial management to employee morale. Once efficiency is hampered, failure looms large.

Therefore, conduct personal research, enroll in a study program, such as an MBA online, find a mentor – do whatever you can to improve yourself.

  1. Not understanding your customer’s needs.

Your business will fail if you fail to communicate with your customers and understand what they require and the responses they provide.

Your customers may like your service or product. Still, they might like it even more if you changed this characteristic or changed that procedure.

What are they trying to tell you? Have you been paying attention? Is it even possible that they are still interested in what you offer? Or is the market in decline?

All of these are critical questions to ask and answer.

Furthermore, a successful entrepreneur is aware of the changing interests and values of its existing and potential customers. Using customer relationship management (CRM) tools, conduct market research, survey customers, stay updated on trends and learn about their interests.

  1. There is no sense of an impending exit. 

Entrepreneurs frequently fail because they cannot predict their ultimate exit strategy early in their journey.

Call it a reflex or judgment, but once the products or services hit the market and the source and speed of competition become apparent, the range of exit outcomes emerges.

Is the exit a public offering or an acquisition? Is it a hire acquisition or a recapitalization? Within a year of their launch, successful entrepreneurs have a sense of how they will exit. The unsuccessful ones, on the other hand, believe in miracles.

  1. The inability to pivot 

Entrepreneurs frequently fail because they cannot adapt to unforeseen events (as if any entrepreneurial conditions are predictable). Pivots are required in all start-ups.

Unsuccessful entrepreneurs are unable to pivot. Instead, they stay on course – even when the rest of the world believes they’ve gone off the rails.

  1. Cash shortage and liquidity 

The next reason for entrepreneurship failure is inadequate cash flow management.

Most entrepreneurs fail to anticipate the cash crunch caused by an imbalance between accounts receivable and payable.

Furthermore, it is common for entrepreneurs to budget for future revenues now. If the payments do not materialize, the venture will run out of cash.

Furthermore, it is possible that venture capitalist funding will abruptly dry up, causing liquidity issues.

While the business may postpone accounts receivable to the future, it cannot do the same with payables because suppliers and staff cannot assure the entrepreneur will honor the commitments.

  1. Creating services or products that are not proven to sell

Just because a service or product sounds like something people will want doesn’t mean you should put the time and effort into developing it.

When it has been proven that your clients will sincerely want and be willing to pay for a service or item, it is time to build it. 

Outsiders may tell you that your latest notion is the best thing they’ve ever heard until they have to pay for it.

The trick is to sell the service/product and see if it works. Suppose you somehow discover that there is massive demand. In that case, you can invest in actually designing the service or product.


Everything adds up in the end.

If your customers prefer your contenders, your employees would instead work for someone else. If you keep letting that happen, you’ll never succeed. 

And it is for this reason that entrepreneurs mostly fail.

True, the majority of businesses fail. It’s also true that many of them are successful, and those who succeed did not do so by chance.

Entrepreneurs who successfully lead businesses understand that it takes a well-planned and conducted strategy. A little bit of luck also helps.

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