Business all boils down to numbers. According to the Small Business Association, 30% of all new businesses fail during their first two years. Among those which survived, 50% close down after five years. And of those who reach ten years of operation, 66% eventually fold up. Why, then, is failure such a common feature of business?
According to business investor Tyler T. Tysdal, while most business fail due to financial reasons, the pitfalls entrepreneurs face are also culprits. In some cases, business owners are not at fault for the failure of their business. But here are common reasons entrepreneurs fail:
Lack of Entrepreneurial IQ
There is a reason an educational background on business or a great deal of experience is a factor of success. EIQ is a general understanding of business situations. An entrepreneur who has low EIQ might overlook certain red flags in the assumption that operations are proceeding smoothly.
Insufficient resources
A good entrepreneur won’t stake the future of their business on today’s profit. A business that fails to expand eventually closes down. Moreover, expansion is never cheap. The lack of resources inhibits entrepreneurs from taking their business to the next level.
However, scarce resources are not always equivalent to lack of immediate funds. According to Tyler T. Tysdal, an entrepreneur can always be resourceful in seeking funds for their business. If they truly believe in their product, they always have an option to borrow funding from financial institutions or seek investors who can revitalize the business’ finances.
TylerT. Tysdal obtained his MBA from Harvard Business School and graduated with a BSBA in Finance from Georgetown University. His finance career began in investment banking with Alex Brown & Sons. To know more about Mr. Tysdal and his achievements, visit this website.
Tyler T. Tysdal 