Do you know why so many startup businesses struggle to survive? It is an uncomfortable fact of business life that four out of five startup businesses end in failure.

So how come so many startups are being shut or closed down? Could it be purely because of poor business marketing strategies?

With the economic downturn making things even tougher for new business, how can you avoid the pitfalls that trap so many fledgling businesses?

First of all, remember that given how many startup businesses fail, following the most well-worn paths is not necessarily the best policy.

We all want to own a business and be called a CEO but the fact is that entrepreneurship is not for everyone.

Reasons why so many startup businesses fail

Is entrepreneurship really for you? Have you asked yourself this a question?

Startup business failure

It is better to understand why so many startups failed so that you will be able to equip yourself and make sure you don’t make the same mistakes.

Although so many startup businesses failed for a multitude of reasons, the underlying issues are surprisingly common.

Below are some of the reasons why so many new startups struggle to survive their first 5 years of operation.

#1). Failure to see the bigger picture

If you have your head down doing everything from sales and marketing to accounting, who has the overview required to steer the business on the right path? It is crucial that you work on the business – stepping back from the day to day to drive it forward.

To do that, you must delegate wherever possible the tasks that can be carried out by others – if you encourage, empower and motivate them the results will astound you.

#2). Failure to plan

You wouldn’t set out on an unfamiliar journey without a map, so it’s amazing how many businesses try to muddle through without a plan.

A good business plan will set targets against which you can benchmark your business – allowing you to make informed decisions about what to do next.

If you don’t have one, prepare a plan now, review it on a monthly basis against actual figures and constantly update it.

#3). Failure to measure

Too many business owners have little or no idea what the key numbers in their operation are. These may not necessarily just be financial, and can include other quantitative measures such as sales conversion rates or website traffic statistics. Successful businesses measure everything that moves and even things that don’t.

#4). Ignoring the cash flow

Whatever happens, cash will always be king. When money is tight, business may not be as abundant as it once was, conserving your cash resources is critical.

Entrepreneurship is not just about setting up the business, it’s also about managing it, and the most important aspect of business management is cash flow.

As a small business owner, you must always keep an eye on expenditure and watch credit control carefully.

#5). Standing still

A wise man once told me that the definition of business insanity is to do the same thing this year as you did last year and expect a different result. He was right. Successful businesses innovate and change all the time – those that don’t are simply left behind.

Make no mistake, getting these basics wrong, or not doing them at all is a recipe for failure. They are the solid foundation on which success is built and must be given the attention they deserve.


Top 5 Reasons Why So Many Startup Businesses Struggle To Survive
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  1. Spot on! These are some of the silly mistakes we are all making in the process of making it big!
    Lord have mercy!

  2. In an attempt to succeed in life, one is bond to make mistakes but it’s always good to attempt rather than to keep waiting!

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