Here's One Reason Why Your Business Could Be Failing My short answer would be that they lose sight of their purpose- why they are here.

By Mohamed El-Dib (Dibo)

Opinions expressed by Entrepreneur contributors are their own.

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According to the Bureau of Labor Statistics, 20% of businesses fail in their first year, whereas 50% fail in their fifth. The former is understandable because the business is very early stage, so it may never crack the market adequately, but the latter is what deserves attention. What happens between the first and fifth year that makes more businesses fail?

My short answer would be that they lose sight of their purpose- why they are here.

The business purpose is quite a vast sea that takes a lot of iterations to master. I have been conducting workshops for entrepreneurs in their various stages, and very few of them really understand why they're here. They're too stuck in the operations of building their e-commerce platform, or ticketing portal, or even producing music for their band, that they don't take some time to put their heads out of the water, and see where they're going, and why they're doing what they're doing.

One of my clients is a band. When I first started working with them, they told me their purpose is to produce "really good music." But as we worked together more and more, we came to the conclusion that music is just a tool to achieve a higher purpose.

Same for a brand like TOMS. Their purpose is definitely not just to create shoes. With their one-for-one scheme (for every pair you buy, they donate one to children who have no shoes), their purpose becomes clear: they want to make sure no one on the planet has to walk barefoot.

Related: The Purpose Generation: Putting Impact At The Forefront

Think of Volvo, for example. When they commissioned engineer Nils Bohlin to create its three-point seatbelt in 1959, they cared about safety the most. When they gave away their patent for free to all car manufacturers in the world, they practiced what they preached. They could have made a lot more money, and sold more cars by being the only safe car in the world. But no, they had a higher purpose. Volvo is definitely in the business of safety. So when we think of a safe car, we think of Volvo.

I was lucky enough to work extensively with my client, Red Bull, for the past three years. While some people may think they're selling some sugared water or an energy drink, I beg to differ. They are in the business of entertainment, and they happen to be selling a drink as a means to achieving this.

We have seen this with many entrepreneurs and startups: they don't know their purpose. As a result, I encourage entrepreneurs to dig deeper into the reason they're doing what they're doing, the real industry they're in, find their target market, define it very specifically, and know the indirect benefits that people get as they interact with your brand.

One of the more surprising (and highly confrontational) questions I encourage you to ask yourself is: "Who hates my brand?" If you are able to answer this question, you will probably have covered all aspects of your business, and know your purpose. And these people who hate you, are they worth the time, effort, and money to be converted? Or are you better off without them?

Finding your business purpose is arguably the most rewarding move you will ever have to make. It will help you with branding, sales, business development, human resources, and marketing communications– to name just a few areas. And saying you don't have time for this because all your time is spent on operations is like saying the car is running out of fuel but we'll keep going anyway.

Related: What You Need To Know When You Are Starting From Scratch

Mohamed El-Dib (Dibo)

Creative Consultant

Mohamed El-Dib (Dibo) is a creative consultant, an entrepreneur, and a conceptualizer. Find out more about him on

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