Businesses go under all the time, for a plethora of reasons. CBInsights looked at 101 different reasons businesses fold and found the top 10 killers. Most of these can be avoided or at least prepared for. Take a look!
Article originally appeared on Forbes.com. Read the full article here.
1. No Market Need: 42%
It seems like a no-brainer, but it happens a lot. You want to find a problem and provide a solution, not the other way around.
2. Ran Out of Cash: 29%
Starting a business is hard and costs a lot. There are tons of hidden costs and things can add up quick. Make sure you have a thorough plan and stick with it, but make sure you leave some cushion for those unknowns that are sure to pop up.
3. Not the Right Team: 23%
Having the right team is almost as important as the product itself. Identify your skills and hire people that will compliment your skills and fill any gaps. Behind every great company is a rock star team of people that got it there.
4. Got Out-Competed: 19%
Keep an eye on the competition. If someone comes out with a similar product or service, you should know about it and be able to explain why yours is better. If it's not better, make it better!
5. Pricing/Cost Issues: 18%
Don't just pick a number and stick with it. Test prices, payment plans and payment methods to see what combination converts the best.
6. User Un-friendly Product: 17%
Whatever it is, if it's hard to use, it won't last. User experience is almost as important as the product itself! A bad user experience can ruin even the best products/ideas.
7. Product without a Business Model: 17%
Like most things in life, it helps to have a plan. Do some research and figure out what kind of business model works best for your product and write up a plan. Be clear and specific.
"A clear path to growth needs to be evident in order for your team, customers and potential investors to buy in." - Stephanie Burns
8. Poor Marketing: 14%
If marketing isn't in your wheelhouse then hire someone who can do it for you. Developing a brand, getting noticed and attracting customers can be really hard, especially if you've never done it before.
9. Ignore Customers: 14%
Don't ignore the people that keep you in business. If someone has a complaint, ADDRESS IT! Good customer service is one of the best things for a business. An angry or unsatisfied customer can be the undoing of a small business.
10. Product Mistimed: 13%
Sometimes a product hits the market a little too early or a little too late. Pay attention to your target audience to stay relevant and make sure you hit the window of opportunity.
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