Why companies fail
According to statistics, 20% of small businesses fail in their first year, 30% in their second year, and 50% by year five; that is to say, a full 70% of small businesses don’t make it past their tenth birthday![1] The age-old billion-dollar question asked by many entrepreneurs and business enthusiast alike is, “What are the factors leading to the success or failure of a business?” Though the success criteria for any business are not clear-cut and differ from scenario to scenario, and sector to sector, we find a common pattern emerging time after time, which when analyzed presupposes that building a business that will flourish and span generations is not just an art, nor an endeavor that is left to sheer luck, but also correlated with the element of science. This is evident in several examples of business that failed in years past and the many more failing today, vis a vis those that have been able to stand the test of time, for as long as that product/service is still relevant, even for as long as several centuries. And though we cannot tell the future accurately to a large degree, these critical success factors can serve as a guidepost to help distinguish between companies that are on the path to success and those that are, clearly, not likely to make it.
[1] https://www.forbes.com/sites/ellevate/2019/10/24/eight-common-reasons-small-businesses-fail/#250988484fbb
