How to Start a Carwash: Eight early indicators of a failed business

Featured on Entrepreneur’s website, contributor Neil Patel discusses early indicators of new business failure in the article “Do You Recognize the 8 Early Warning Signs of a Failed Startup?”

“Startups fail at the rate of 90 percent,” writes Patel in the article. “That’s kind of scary, if you ask me.”

In the article, Patel lists eight early signs of a failed business:

Not knowing your customers. You have to figure out what your customers want. “I know this sounds old hat, but I have to say it,” says Patel in the article. “Everyone repeats hackneyed phrases like ‘knowing your target audience’ and ‘developing a persona,’ but few businesses actually get it right.” You need to figure out what programs and fears your customers are facing as well as what goals they are aiming to achieve.
Having an inflexible mindset. What you consider to be the best way of doing something is not always right. You have to be flexible enough to adjust your mindset. Challenge your way of thinking. You can do this by trying new things, taking more risks and understanding differing points of view.
Thinking the market won’t affect you. You have to deal with an often unpredictable and indomitable market. You’re setting yourself up to fail if you think the market’s ever-evolving forces won’t affect your business and/or industry. You have to keep adjusting and evolving along with it to stay successful.
Not being ready to pivot. Chances are you will fail if you are not ready to pivot. In fact, explains Patel in the article, you may have to pivot five, 10 or 15 times within the first few years. The quicker you pivot, the more likely you are to stay up and running.
Slow to execute. You have to execute to stay afloat. And, you have to be ready to execute faster than your competition, asserts Patel in the article, adding “The best entrepreneurs are the people who hustle.”
Doing the wrong things. Being busy isn’t always a good sign. If you aren’t busy doing the right things, you could be on the path to failure. Make sure you are completely clear on what you are doing and why. Ensure you are busy doing the right things instead of the wrong ones.
Losing sight of revenue. A major warning sign is when you lose sight of revenue. With so many moving parts in a new business, you have to make sure you are keeping tabs on everything. However, states Patel in the article, you have to make sure to stay focused on revenue. “Revenue is the goal. It’s the end game,” he adds in the article. “This is why you’re doing what you’re doing.”
Forgetting to keep an eye on expenses. If the stream of funds dries up, so too will your new business. Make sure to monitor your expenses. “There’s even a term for it — runaway — meaning the time you have until your startup runs out of cash,” explains Patel in the article. “So, go rustle up some funding.” As the business owner, you are responsible to keeping tabs on your money and ensuring you have enough to keep your business alive.