Why 80% Of New Businesses Fail

In what could be described as astounding disclosure, Bloomberg sometime ago revealed that eight out of 10 new businesses fail within the first 18 months after coming to life. That would mean 80% of all businesses, a fact that is bound to bring every potential business owner to pay attention.

Bloomberg articulated the following four reasons for the high attrition rate of new businesses.

Inability to design profitable business model

The success or failure of any business depends on the designed model. If the entrepreneurs miss a profitable model from the beginning, the business boat will sink within a short time.  

Leadership breakdown

Poor decision making and weak leadership skills on several occasions have led to business failure both small and big and new businesses with organisational structures and character yet to mature are especially probe to fail in this respect.

Failure to communicate

Many entrepreneurs have bled to death because of their failure to communicate or make their business intentions clear and concise enough.   The tool of communication is very key in business survival and no entrepreneur whose goal is to succeed would neglect it.  

Not in deep touch with customers

Most entrepreneurs do not consider the need to be in close touch with customers and as such, they isolate customers in the first 18 months of the business.  Customers occupy a significant position in business and any failure to carry them along would result in business stagnation or failure.   

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