I asked ChatGPT to explain why most small businesses fail in the first 5 years
Here’s its answer.
“There are many reasons why small businesses fail, but some of the most common reasons include a lack of capital, insufficient market research, not having a well-defined business plan, poor management, and competition. Additionally, the early years of a small business are often the most difficult, as the business owner is trying to establish themselves and gain a foothold in the market. This can be a challenging and stressful time, and if a business is not able to overcome these challenges, it may ultimately fail.”
Not bad, in my opinion.
Ultimately most fail due to lack of cashflow (capital), and that is often because of the lack of a well-defined business plan that relies on market research as at least one component. The second sentence can really be defined as challenges with customer acquisition, or getting people to pay for what you do/make.
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