If you’re a small business owner in your 1st year of operation there’s approximately an 80% chance that your business will fail. And even if you make it past your 1st year without going under, there’s still a 50% chance that within 4 years your business will cease to exist. 

Whether you’re a seasoned small business owner or an entrepreneur just starting out, these statistics can be a little scary. However, you shouldn’t let the failures of others kill your own entrepreneurial spirit. Instead, understand the most common reasons why most small businesses fail and make sure you don’t repeat these same mistakes in your own business.

To help you out (because we care) we have listed 4 of the most likely reasons your fledgling small business will end its life in a dreadfully tragic demise.

1. Lack of Leadership

A great business leader is distinguished by their ability to command and inspire compliance for actions that benefit not only their business, but also those whom they lead.  Without such great leadership across the chain of business command, your business’s operations will be doomed to wander, meander, and procrastinate until nothing happens aside from the entire organization’s sad and pathetic death.

2. Lack of Innovation

Chances are that your business model is not at all new. Chances are that you will face a fierce set of competitors once your business becomes operational. So how are you going to set yourself apart? Somehow your business will have to be a cut above the rest (or at least most of the rest).. Innovation and original value propositions will be the best means to avoid the inevitable doomsday destined for businesses that refuse to be anything but banal and cookie cutter.

3. Lack of Customer Intimacy & Insight

Your business’s relationship to its customers is just like the relationship you would have with a spouse. If you neglect your spouse’s needs and refuse to stay in touch with them by neglecting their feedback, you can be sure a nasty divorce is imminent. Same goes with your customers. And when the customer (or spouse) goes, you can be sure that all your hopes and dreams will be soon to follow

4. Lack of Profitability

Money turns the world on its axis. All the more so for your business. A sound business model involves strenuous planning and projections for future revenue streams. You are fooling yourself, your employees, and your investors by believing all it takes to be profitable is a good work ethic and positive attitude. Honesty in this context is crucial, as it could help save years of wasted effort on a business that was doomed from the start because of improper planning.