3 common reasons behind small business failures

Disappointed with your business results? Consider these three common causes of business failure.

Disappointed with your business results? Consider these three common causes of business failure.

Running a small business often feels like a serious uphill struggle. It can seem like you’re putting in massive amounts effort and getting hardly any positive results. It’s enough to make you feel utterly discouraged. It’s especially frustrating when you can’t pinpoint exactly what it is that standing between you and success. If you know what the problem is, then you can figure out a solution. But often the problem isn’t readily identifiable. So small business owners find themselves flailing around trying to offer solutions to every possible problem. Not only does this not solve the problem at hand but wastes valuable time and effort.

Far too many small businesses fail because they’ve been unable to identify what it was that was standing between them and success. But the problems that small businesses face can be pretty common, and the trick is being able to identify them. Here are three of the most common problems that could be causing your business to fail.

Taking on too much

Every business will have far more elements that you need to deal with than you expect. The problem arises when you attempt to deal with everything completely by yourself. No one can handle everything alone, and far too many small business owners try to take control of every aspect of their business. The key to running a successful business is balance. You’ve got to know when to step in and when to step back. The best thing you can do is to know exactly where your skills are best suited. Perhaps you’re a genius with numbers and should be focusing on the accounts side of things. Or maybe you’re a people person and marketing is your forte. Whatever it is then you’ve got to be aware of who’s picking up the slack elsewhere. Outsourcing is a great solution to this problem. Whether it’s an accountant, SEO company or specialist IT consultant, there are dozens of services out there to fill any gaps in your skill set. That way your business keeps running smoothly, but you avoid taking on too much, including things you’re not really suited for.

Inability to find customers

You might have the best idea in the world, but that means nothing if your business isn’t actually reaching the right people. The biggest reason a lot of small businesses fail to find customers is a lack of research. Without doing the appropriate amount of market research, you’ll never be aware of whether there’s even a market for your business. The last thing you want is to make a financial commitment and then discover that you’re business was doomed from the start because of lack of demand.

Even if there is a market for your business, you can still find reaching customers difficult if you’re not sure exactly who your target customer is. Do you really know who your target demographic is? Go beyond the obvious things like age and gender. What are their typical consumer habits? What complementary businesses does your target customer use? Questions like this might seem overly specific. But they will do wonders for creating a customer profile that will allow you to market your business as effectively as possible.


When you first set up a business, it can often be something that you do with friends. This can be a great benefit to your business. A strong working relationship between core founders is crucial to getting a business off the ground in the first place. But eventually, you have to look at things from a more detached perspective. If your staff is solely made up of friends or family, are you sure you’ve got the right people for the job?

Your employees are the backbone of your business and without them all working as productively as possible, it simply won’t stand a chance. You need to be brutally honest with how effectively your staff is working. If there’s dead weight, then the rest of your company is going to find themselves dragged down. You’ll lose huge amounts of productivity when people are having to pick up the slack for one individual who isn’t pulling their weight.

These are three of the most common reasons a small business might not succeed. But don’t think that they’ll be the only ones. Businesses are massively complicated, and there could be any one of hundreds of things standing in your way. The key is to make sure that you’re paying close attention to every aspect of your business. As long as you’re not letting slip by unnoticed, then there’s nothing to stand between your business and success.

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