Home Articles Why do so many startups fail? Here are the top six reasons

Why do so many startups fail? Here are the top six reasons


Starting your own business, no matter what it focuses on, is something that can be exciting as well as stressful.

While the prospect of being your own boss and turning something you love to do into a business is alluring, it can be stressful trying to keep your business marching towards success.

The simple fact is that a lot of start-ups flounder and fail. But plenty of them don’t, and success isn’t out of reach. But just like building a home, you need to know what you’re doing in order to build a successful business. And just like a home, any good business is built on a solid foundation. Without some solid footing, a start-up will fail.

Here’s a look at some of the most common reasons start-up businesses fail.

1. No market research

You may love to surf, but opening a surfboard shop 100 kilometres from the beach probably isn’t that great of an idea. A surprising number of start-ups begin their life as someone’s passion, but the business side of things isn’t considered. You need to know that there’s a demand for what you offer, or your business will struggle.

2. Too big, too fast

It’s easy to crave that feeling that you’re in charge of a big business. But do you really need five employees and a big storefront that costs $2,000 a month in rent? Odds are that when you’re just starting out, you don’t. Take baby steps towards your ultimate goal. It’s fine for a business to start in your spare bedroom with you as your only employee. With a larger size comes larger overhead costs. Don’t expand until you’re ready.

3. Poor marketing

You may have the best business offering the best goods and services on the planet, but if you don’t let anyone know you exist it will be hard to succeed. While word of mouth is important, you need to get that word of mouth started. Take a look at marketing options and find the ones that are affordable and effective. You don’t have to spend a fortune on a TV spot, but something like a targeted mailing or an online banner could be perfect.

4. Poor online presence

Similarly, you need to have a strong internet presence. This means a good website and good social media sites set up. Your website is like your online brochure, and social media outlets like Facebook, Twitter, and LinkedIn let you connect with customers and engage them. Start-ups who lack web presence will fail.

5. Poor motivation

One of the biggest mistakes start up owners make is to assume that since they own a business, things will be easy. In fact, you have to work a lot harder to succeed as a business owner. Lazy owners are the number one reason that start-up companies fail every day. You need to be prepared to work hard for success.

6. Poor planning

Finally, you also need to plan ahead. Many businesses won’t turn a profit in their first six months to their first year, and you need to know how to not only get your business to where it needs to be, but how to survive until it gets there.

Samantha Hurst has built up and sold several online businesses, and now runs a business consultancy Click Start Digital.