I asked my Linkedin connections to send me life and business questions. I want to improve my writing and write about things that my network would find interesting. I do not have all the answers, I am trying to shine a light on them from my perspective and background. This is a starting point for a good discussion. Please join the conversation and contribute your thoughts and knowledge in the comments. Be respectful and curious, who knows what a simple question can lead to - for you and your business. So far, this experiment has been fun, eye-opening and humbling for me. Having such passionate and wonderful human beings in my circle makes me jump out of bed every day. Thank you to everyone!

Simon Tarifiu asks

WHY DO BUSINESSES FAIL?

He adds, “How can I get the right business - What kind of business is going to run?"

Gulp. A huge question Simon. When you go to Amazon and search for business books released in the last 90 days, you get over 50000 results. A thorough answer is much more complex than I can cover here in an article but that won't stop me from giving it a shot.

Your question is about two things - one is why businesses fail in general. The follow up questions you asked are about the relationship between you as a person and a business you lead/work for.

A business is not rocket science.
In the most basic way of thinking, it is about creating something of value for someone else.

A business can be as simple as one person selling one product or service to another person. On the other end of the scale, it can be a huge global thing involving thousands of products, services and people. Still, both extremes are about making or creating something of value for someone else.

As long as the business creates value for other people, it should work (in theory).
So why do 80% of businesses die before they reach toddler stage (18 months)?

Let's call the

business/ entrepreneur/corporate “PERSON 1”
client/customer/market “PERSON 2”
value/product/service “THING”

Where I see businesses fail is often one or more of the following situations - most of those overlap.
Here is my take on typical business killers:

- PERSON 1 makes a THING but the THING is not good

- PERSON 1 makes a THING but doesn't believe in it/ only does it for money/ fame/reasons that won't last long

- PERSON 1 makes a THING but PERSON 2 does not know about it

- PERSON 1 makes a THING but PERSON 2 does't like the THING (function, price, features...)

- PERSON 1 is very much in love with their THING and forgets that the THING is for PERSON 2

- PERSON 1 doesn't talk to PERSON 2 about the THING to make it better for PERSON 2

- PERSON 1 talks to the wrong PERSON 2

- PERSON 1 makes a THING but PERSON 2 doesn't like PERSON 1

- PERSON 1 is bad at leading a business (mental health, paperwork, legal things, taxes, cashflow, logistics, hiring, planning, details, future strategy....)

- PERSON 1 does not recognize that PERSON 2 changes over time and doesn't change the THING appropriately

- PERSON 1 releases a THING before PERSON 2 knows that they want the THING

- PERSON 1 makes the same THING as another PERSON 1 and PERSON 2 buys it based on their location, price, loyalty, trust, specifications...

You get the idea, there are a million reasons why PERSON 1 might fail. That explains the 80% rate. Each of the three moving parts in this equation needs to perform well to make it all work - and the times in which we live add to the complexity.

You could also look at some of the businesses that you don't like to buy from and list your reasons why. Sometimes it is easier for our brains to look at what not to do before we can figure out what to do.

Your follow up questions were about how YOU can make sure that you choose the right business.

Take the above list and work through each potential business killer.
Only make a THING if you are 100% behind it. People can smell fake enthusiasm from miles away.
Get a mentor, a coach, someone who is good at running a business and get their honest opinion on your skills.
Understand that a business is a marathon. It will take over your time, your life, your financial and social circles. Be willing to do it anyways.
Give yourself timelines. Give yourself time out.
Don't neglect your health.
Stay in touch with your friends.
Strive for a balance of planning and being spontaneus.
Invest in yourself. Learn. Practice.
Be brutally honest with what you do well and what you don't.
Delegate what you don't do well.
Learn to enjoy the ups and downs.
Manage your energy. Simplify.
Understand risk.
Learn about time management.
Remove ballast and distractions from your life.
Figure out exactly who your PERSON 2 is. Love PERSON 2 like crazy. Talk to PERSON 2 all the time.

After all, the THING you make is for PERSON 2, and without them, you have no business.

There are thousands of biz books out there, each highlighting different aspects. Some of my personal all-time favourites are:

Tony Hsieh - Delivering Happiness
Ray Dalio - Principles
Jeff Gothelf and Josh Seiden - Sense and Response
Jim Collins - Good to great
Dan Ariely - Predictably Irrational
Nassim Nicholas Taleb - Fooled by Randomness
Seth Godin - seths.blog
Dan Roam - The Back of the Napkin

Thank you so much Simon Tarifiu for asking this question. You made me reflect on a very complex question and I loved the challenge of writing a simplified piece about it.