The Real Reason Most Businesses Die

0:00What's the real reason most businesses die? I think it depends on how we define businesses dying. Because most businesses die because the entrepreneur quits. Because if entrepreneur doesn't quit, then it's very common for businesses to evolve and change models and change structures and change pricing. Um, I can't remember, but I it's you know, there's a number of examples of like um, I want to say it was like Mitsubishi or Samsung. It might be Samsung like started as something completely different from like electronics, but it started there and it just has continued to evolve. And so, I think it depends on how we define businesses dying. If we say like this is bankrupt, it really like it like it's it's more like I I would almost I'd rather almost have like when do like why do entrepreneurs quit is almost the question because like businesses come and go, products come and go, the market changes, technology changes, like it's normal for those things to occur. But if it's more like if the question is like why would someone start and not succeed?

1:00Most of the time they don't persist. And their definition of starting is what most people who are you know, successful entrepreneurs would be like, you didn't even start. You know what I mean? Like I um I I had a This is a couple years ago, but I was I had a dinner with a friend of mine's kids and they were all college aged. And uh they said they liked entrepreneurship and so I you know, I I razz them a little bit. Um, and they were like, "Okay, you know, I'm I'm going to uh we're I'm going to start this business." And I was like, "Awesome, man." And so, I think 6 months later um I saw them again cuz I was hanging out with him, bro. And uh I was like, "Hey, how's the business going?" And they were like, "Oh, you know, uh I'm just working on getting the you know, the LLC set up."

1:37And when I heard that, I was like, "What? Like, the LLC? I was like, that's like 30 minutes, man, tops. Like, go online, go on LegalZoom, go on whatever the hell you want. Like, it's all automated. And then like take the LLC, start a bank account, like here Okay. Now what? Like, that's Saturday. What else did you do for the last 6 months? Nothing. And so it's like the vast majority of business owners fail before they start because they never start to begin with, which is why I think courage is such an important thing. Like you have to start.

2:09And a lot of times it's like a lot of newer entrepreneurs convince themselves they did more work than they really did because they sat in front of a computer and messed around. But like did you figure out something to sell? Did you let people know about it? Did you ask them for money to do it? Where do you fail there? Like and if you have a service business, which is 78% of the US at least, you can always collapse service business down to just the person who started it.

2:38And so like there's no reason for a service business to ever really fail. Cuz your your main thing is headcount. That's going to be your main cost. You might have some capital expenses for equipment, maybe. Right? But like the vast majority it's person doing thing for other person. Okay. So like you can collapse all that down. But like if you if you if you got in trouble, it could still be you doing for money. So did that business die? Might downsize, but it might not die. It dies if you stop.

3:03On the physical product side, uh you might have hard costs in order to sell something. That one is where like the core economics of the thing matter a lot. Um and so it's like we have to sell it for not just a profit, but enough profit to fund the rest of the business and growth. And that's where pricing can be a problem, obviously really important, and branding, distribution, things like that. But that's a little bit further down the road. But that's not really why most people fail. >> Right. >> Most people just give up because I I you know what? To be honest, like I I don't even know that many people who have failed a business. Realistically, I don't.

3:35I know people who have changed businesses many times over the years, but like they people don't really give up. Most people just don't start. If you like this video and you're business owner who wants to break through your current revenue ceiling, I just took every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling roadmap that I've used to go from zero to one, zero to 10, and zero to 100 plus. And so, you can click here and you can check it out. Again, absolutely free. And since you're a business owner, I appreciate you and enjoy.