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Here are 5 according to Alex Hormozi : According to Alex Hormozi, 97% of businesses fail for several reasons, largely due to a combination of missteps that occur in the early stages of building a company. These can be broken down into several key factors: 1. Lack of Lead Generation: Businesses often fail because they cannot generate enough leads. Leads are the lifeblood of any company. Without them, there is no one to sell to, which ultimately results in failure. Hormozi emphasizes that having a constant flow of leads is critical because more leads provide room for error and learning . 2. Failure to Identify the Right Customer: Many businesses struggle because they do not focus on a specific customer type. In the beginning, entrepreneurs often take on any customer to generate cash flow, but as the business grows, this becomes unsustainable. Businesses must learn to focus on their ideal customer — the ones who bring in the most revenue, are easiest to service, and fit the company’s strengths. 3. Inability to Create a Compelling Offer: Hormozi argues that businesses fail when they don’t craft offers that are irresistible. Without a strong offer, people won’t buy. His framework emphasizes creating offers that are so good that customers feel “stupid saying no” . 4. Poor Operational Complexity: As businesses scale, operational complexity increases. Many businesses cannot handle the increased demands of varied customer needs, different pricing models, and multiple offerings. Failing to streamline and systematize operations to serve the right customers efficiently can overwhelm the business . 5. Financial Mismanagement and Misalignment: Cash flow issues, underestimating the amount of capital required, and poor financial planning also contribute significantly to business failure. Without proper financial controls, businesses can run out of money quickly or be unable to scale when opportunities arise.