Why most of the business ideas fail?
Below are seven basic reasons that in the practice can not appear only one, they are likely to appear as combination between two or more of them.
1. The idea is not good idea.
One of the most common reasons for failure of a business idea is quality of the idea itself.
What I am meaning by good or bad idea?
Good ideas are the ones that offer real value to potential customers. They are solutions that solve a problem or meet a particular need for those customers. Everything else is just an idea, without the potential to be converted into successful business.
2. It’s not the right time for that business idea.
If the idea is not something that refers to the time in which we live, chance of failure will be greater.
Each business idea must align under the existing market situation and current trends on that market. If it refers to something that could be valuable for time before 10 or 20 years, or too forward in terms of timing and views of potential customers, it will fail.
3. The idea is really good, but the market is not right one.
Good idea, in the right time also can fail if it refers to a market that is not the right for particular business idea.
Each market has its own specifics that will characterize a business idea. For example, a market where predominates warm climate and heat, will not accept winter coats.
4. There are not enough potential customers.
If your idea is for the right market, but the market doesn’t guarantee that there will be enough people who will buy what you will sell, still there will be a chance for failure.
Great business ideas and the right market at the right time requires a sufficient number of potential customers in that market to succeed.
5. You don’t have an appropriate business model.
Although a business idea can have all the previous features, however, poorly designed business model that doesn’t guarantee profitability of the business can lead to failure of your business idea.
You need to align and realign all other elements of your business to support your business idea if you want to ensure success. Think about relationships with your customers, distribution, cost-structure, the revenue strategies, prices…
6. Entrepreneur as a reason for failure.
We already have examined the characteristics of the idea and future business as reasons for failures, but the entrepreneur as the core of every business also in many cases is a reason for failure.
If an entrepreneur doesn’t have adequate knowledge to implement the business idea, doesn’t want to work in such area, doesn’t have passion for the business or is unable to implement it, chance of failure will be bigger.
7. Lack of a real team
And of course finally, implementation of the idea will need a real team of people who will contribute to success. The task of the team is appropriately turning entrepreneurial vision into reality.