Why Do Small Business Startups Fail?

small business failure

Failure: it’s the last thing you’d want to call attention to when you’re just starting your small business. According to a survey conducted by the Small Business Administration (SBA), seven out of ten small business startups survive at least two years and over 50 percent endure at least five years.

Don’t fret, however. If you identify the cause of failure forthright, you’ll less likely to be a victim of it.

We list down 7 reasons why new business ventures have little or no success.

Starting a business for the wrong reasons

What is your business objective? Are you doing this to rake in profits or is your business your passion? What are your long-term goals? Do you think having your own small business entitles you flexible time and more hours to spend with family? Or do you like the idea that you’re your own boss?

If you have a passion for what you’re doing and strongly think that your product or service would fulfill a positive, productive role in the marketplace, then you’re on the right track.

Keep in mind that to thrive in this business, you need to be physically and mentally fit to endure possible obstacles that may come your way. You also have to deal with and interact with various types of individuals (this means your customers) so having a pleasant character is important.

However, don’t be afraid to try and experiment. If you do fail, use the lessons learned from the experience to succeed on your next business venture.

Having insufficient funds

Let’s face it: usually, most small business owners have insufficient operating capital.

Never underestimate how much money you need or you’re going to be forced to close even before you have a fair chance of succeeding. Don’t have unrealistic expectations of your profits, either.

It is vital to establish a business budget to save you on the starting and staying costs. Take into account that most businesses take at least two years to really move forward, meaning that you’ll require adequate funds to cover costs associated with your business until incoming revenue can pay for them.

Being poorly located

Every entrepreneur know that having a strategic location for your business is crucial for its success. Good locations can enable fledgling businesses to pull through and thrive, whereas poor locations can mean disaster to even the most business-savvy entrepreneur.

Factors to consider in obtaining a good location include:

  • Customer accessibility, light traffic, parking and lighting
  • Safety and current condition of the office building
  • Community receptiveness and history
  • Incentive programs for new small businesses
  • Competitor location

Lack of planning and poor management

To achieve success, business owners know that strategic planning and hard work go hand in hand. It is important to have a detailed business plan first before starting a business. Many small businesses fail due to frailty business planning. Such plans should be realistic, accurate, and updated with future projections about the business.

Additionally, businesses fail because of poor management. New business owners usually lack management and business expertise. Unless they identify what they lack and seek assistance, their businesses might go downhill.

Successful business managers are good leaders who build a work environment that encourages productivity, skilled at hiring competent worker, and strategic thinkers.

Lacking an online presence

If you have a business, you should have a website. Most potential customers search for you, your product or service online since Internet users account for most of your clients these days, anyway.

Well-designed, clean and user-friendly websites are ideal. Also, you could set up social media accounts to track potential customers (outreach to a certain demographic), drive traffic to your website, increase sales, and obtain customer feedback. Facebook, Twitter and LinkedIn are some of the social media outlets you can start off by promoting your business brand.

Top Small Business Tips For Success

small business tips for success

Are you struggling setting up or expanding your small business? Every small business owner aims to succeed, and to help pave a path to that success are easy, accessible, low-cost tools that can help increase profits as well as reduce expenses. But it’s not just the technology available that can help you succeed. It’s also keeping the right attitude and hiring the right people to help your business grow.

Listed below are key small business tips for success. Just remember that they’re just a fraction of what you can do. Don’t be afraid to keep on learning, discovering and experimenting to help make your business ripe for success.

  1. There is a proliferation of web services that you can find online. If your business is targeting customers in a specific region, you can use Google Places – Google’s free web service that lets you access detailed information about places spanning an array of categories. Google Places puts your business ads out there whenever someone searches for you within a certain city. It’s being used by tons of people and businesses looking for products, services and other prospects.
  2. The Internet has a profusion of free templates that can help you creatively create and modify flyers for free. For instance, LayoutReady offers free Microsoft templates that enable you to easily customize in Word, PowerPoint or Publisher. Aside from helping you save hours from layout time, you don’t need to hire an expensive graphic artist to design flyers for you.
  3. As long as you have a Gmail account, you probably have used Google Docs for your service. And that’s great. This web service works as a spreadsheet to document, store or calculate your data into a cloud where people can collaborate and share. This prevents you from purchasing hosting services that can prove costly in order to share your documents with other people.
  4. Have you considered getting a virtual phone system? Save on phone bills by downloading Skype or installing Mighty Call, a virtual phone system designed to help business owners with their communication and advertising needs. Mighty Call also has a mobile application that’s downloadable for free. The benefits of having virtual phone systems include helping you reduce the costs associated with answering services and creating multiple extensions, as well as save you money on customer support issues and helping you stay organized and thoroughly connected.
  5. To be successful, running a business requires getting assistance from the right kind of people. In this case, it’s hiring the right like-minded employees that will work for you for long-term and be there by your side as you grow your business. Let your workers take the load off of you so that you can excel in your business. The key is leveraging: if it will take you a month to build a website, hire someone who can do it for only a week. Hire someone with solid marketing skills if you know that task will veer you away from your productive hours. Focus on what you need to do best and let your workers do the rest.

Why Starting Small Businesses Has Been Easier Today Than Before


Many years ago, starting and growing a small business was an intimidating overture. Setting up those in-house office functions can be time-consuming and costly, which includes payroll systems, accounting, and supply-chain logistics among many others. Conference calls require for expensive equipment and comment fill-up forms were handed out to earn some customer feedback.

Nowadays, technology has given businesses and entrepreneurs the opportunity to accomplish success with low-cost business models through online payment systems, cloud computing, social media marketing and a host of mobile web applications. While it’s still difficult to secure funding or loans to start businesses, there is an indication that the loan sector (whether it’s from the federal government or a private or public organization), there are already ways on how to increase your loan opportunities.

Here, we are going to list several reasons why it’s so much easier to get your business off the ground than ever before.

Cloud computing

Cloud computing is a host of remote servers that can store and handle all your data. It also provides countless resources and services including IT support or an application software within a cloud. This enables business owners to gather data or information from any Internet-connected device.

Thus, saving money by helping reduce the storing, updating and maintaining costs associated with a personal server. According to a recent Microsoft survey, businesses can expect to gain at least 25 to 50 percent savings on IT costs. Cloud computing providers such as Amazon, Google Drive or Dropbox render data on the utilization of your cloud resources, which enable you to better understand, plan and gear up for your business needs. Cloud computing web services lets you only pay for what you need, and enabling you access to information that you need any time, anywhere.

HR Outsourcing

In this modern day and age, outsourcing can be a good investment for your business. Hiring a handful of employees can form a weighty administrative load for an inexperienced small business. To gain momentum in today’s market, you can outsource your everyday HR needs, from payroll to marketing and tax tractability. Not only will you save time, effort and funds, you keep your fledgling business from getting out of turn.

Depending on the situation of your business, outsourcing key functions can enable you to save a minimum of five to 15 percent of payroll costs and taxes.  Get more information from the National Association of Professional Employer Organizations on how to kick start your outsourcing projects, get marketing support and referrals, and gain vital member resources.

App Installing

Apps are great tools for assisting you in your daily business activities. Some apps are designed to make your documentation processes easier such as helping you with online surveys, order forms, recruitment applications, sans the extra HTML coding. One example is WuFoo that lets you collect payments and “create online forms in a snap”.

Want to provide coupons and loyalty promos to your customers thru their mobile phones? Install Google Wallet. This android app converts your phone into a credit card.

Geo-targeting clients

You don’t have to search that far for prospective clients or how to reach a certain audience. Why not geo-targeting them on Facebook? Facebook ads are regarded as one of the best ways to successfully achieving location-based marketing.

Also, Google’s Small Business Network’s Google Adwords lets your ad appear next to the search results when a user Googles one of your target keywords. These services permit you to effortlessly scale up your ad revenue as your business grows, accurately track customer location, and simply allows you to reduce your marketing costs compared to using traditional media ads.