Why do businesses fail? With all the effort people put into starting up businesses, you’d think more would succeed. But thousands of small businesses fail each year.
A quick drive around the web reveals a lot of reasons why businesses fail:
- MSN has a list of the top 10 reasons businesses fail
- The US Small Business Administration lists its own 10 reasons why businesses fail
- And this anti-Amway site provides some information on how most small businesses fail within five years
- But, best of all, is this MIcrosoft article on why business failure is actually a good thing
I think it’s a mistake to say “fail”. Fail does not mean go bankrupt. Many people start up home businesses because they want to stay home with their children, supplement retirement income, generate multiple income streams, earn money on the side, satisfy a desire to moonlight outside their existing job, or indulge an interest in a particular field. When those businesses close up, they don’t necessarily “fail”. It often just means that the owners have moved on to a new stage in life. People become consultants and start home businesses for many reasons. Instead of focusing on how many close up shop, we should ask how many were satisfied with the outcomes.
Why businesses fail