Why Startups and Small Businesses Fail? Reasons, Statistics, Errors They Make

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Entrepreneurs and their startups make the business world go round. But starting and running a new company is not an easy task. Some researches show that only 1 in every 12 startups continues operations in the long run. According to these statistics, it would mean that more than 90% of all starting companies fail, which also mean that less than 10% are successful. So, if you are going to start a company, your chances are not that great… But why does this happen? Well, here we will show you some of the most common reasons and errors entrepreneurs make. Below is a cool infographic on which you can see pretty interesting statistics exactly on the matter. The Startup Genome Project’s research is based on data collected from more than 3200 starting companies and gives a clear picture about the most common reasons for failure. You can see some really interesting things here. For example, rising too much money turns out to be a risk for a starting company, because this can cause a premature growth of the business. Fast growth can be very dangerous for your business… Have a look below.

Why Start-Ups Fail?

See why exactly start ups fail.

See why exactly startups fail.

According to the infographic, the number one reason for startup failures is premature scaling. The guys from the Startup genome thing, that this brings many other problems with itself which finally lead to closing the business.

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