Why does a business fail?

I put that question to 100 CEOs, and these 2 answers stood out.

Lucy Hitchcock, founder of Partner in Wine, and Sassy Digital; plus host of The Winging It podcast:

“Honestly, I think the ignorance of founders and how this manifests itself in their decision-making and company culture.

There are so many types of ignorance within founders, and that comes from the inability to self-reflect and look inwards, where we are so risk-averse, or perhaps the want to not look inwards because you're worried about the cracks you might find.

When I think about all the reasons why my business might fail, this comes down to my own personal weaknesses. An example of one area is that I'm a creative person; numbers are not my thing. Instead of burying my head in the sand, I try really, really hard to understand this, and when I can't, I work with people who do and can explain it to me.

If you're not able to self-check and look at your own weaknesses, you'll never be able to have a healthy business in all areas. It's absolutely a work in progress, especially as your business grows and evolves and the problems you start to face change, but having a weekly check in with yourself and asking what you're struggling with, and where you might be able to ask for help has absolutely changed the way I run my business. Over the past year, it's changed my business growth exponentially.”

Oliver Cookson, founder of Myprotein, Verve and Cookson First Aid:

“Businesses fail for many technical reasons and problems, but most commonly are created by 4 root causes:

Assumptions: Making any type of assumptions about what the customer wants, the market or the logistics of the business.
Self-Deception: Lying to yourself, or the wider company, to avoid fixing deficiencies. (On a personal level: saying you tried your best, when you didn’t. On a team level: not being honest internally about what needs to improve.)
Hiring & Culture: “Yes man” syndrome and collaboration deficit.
Responsibilities & Due Diligence Deficiencies: If a product isn’t performing as well as wished, it’s probably because internally, a company isn’t collaborating and being honest with one another or is operating on assumptions.

There’s a famous clip of Tony Robbins where he asks the audience why their businesses failed. They said: “not enough capital.” He counters that it’s because of a lack of resourcefulness. You can always go out and get funds. This is an example of self-deception: fixating on a false reason why it can’t work, and convincing yourself it’s true."