6 Reasons Small Business Fail


6 Reasons Small Business Fail

Many people are enthusiastic to start a business. In fact many get the right foot in, but unfortunately, due to factors that we’ll discuss, many business startups fail.

According to statistics, only half of business startups survive the first 5 years, and only a third survive 10 years…So why?

When you look at it at the surface level, you might think: cash, bankruptcy, low management skills, etc. But here, I am going to list the main factors:

1-     Poor Planning and Management

Poor management is usually the number one factor affecting business failure. Let’s face it, in order to thrive, you need to have management skills including: getting help, team work, listening, planning and planning and planning, not getting defeated by failure, encouragement of employees, confront changes, and envision a great future for your business.

2-     No Cash

Capital is the main parameter needed to start a business and to maintain one. You will need money for your direct costs such as your products and services, as well as your indirect costs, such as maintenance, payroll, and administrative costs and so on. If you’re out of funds, you’re going to go into debt, which will lead to bankruptcy and failure of your startup. As a business manager, you should know where your funds go and where they come from. Failure to do so and lack of control on finance will create a crisis for your business.

You can solve this by using professional accounting software to control your finance, this will keep you in control and you’ll always have an overview of where you stand.

3-     Not in Line with the Digital Revolution

In today’s world, every person owns a tablet, a smartphone and spends over half their time surfing the net. So if you’re business lacks a website and presence in social media networks, then consider your business going down the drain from the start. If your customers are online and on mobile, then why aren’t you?

If in this era, your business doesn’t have a website, you are losing revenue by the moment, so make sure you invest in a good looking, creative business website that represents your brand.

4-     Not able to Differentiate with Other Businesses

What makes your brand different? Make sure when planning out your marketing strategy, you determine what parameters differentiate you from your competitors. Do your customers know what makes you different? So what makes you unique in the marketplace? Point this out and advertise this so everyone can see.

5-     Over Growth

A growing business needs careful planning. So if you want to expand, first research your demographics, location, product demand, and base your business growth on solid foundations. Business expansion needs strategic thinking and analysis in order to not fail. Make sure you have the right resources before you plan on your expansion.

6-     Too Much Confidence

This is a challenge for all business owners. Instead of relying on yourself, you should listen to your employees, your staff, and give responsibility and rely on others to help you. Remember, most successful business owners success is founded on teamwork and leading with reliance on your employees and people around you.


So if 50% of business are failing, then 50% are succeeding! You can be the full half of the cup, but make sure you abide by the rules and experience others have paved the path of. As business owner, you can make it to the top if you set your mind to it, strive for it and believe in it.