5 common pitfalls that ruin small businesses and how to avoid them

By Anna Stinson

Picturing all the events and factors that can ruin your startup is probably impossible, so don’t even bother to try. Some of the most dangerous threats are the ones that people never see coming. Those are the ones you need to keep in mind.

It’s important to exercise caution. Small businesses and startups are vulnerable enterprises. You can help your company stay afloat by working to prevent these common pitfalls.

Insufficient funds

A business needs money to function. And it needs enough of it. To fund a startup is no easy task. Entrepreneurs often have trouble attaining credit, finding funds, or pooling personal resources. More often than not, it all comes down to making ends meet.

When the spending outweighs the revenue, problems can occur. Monitor your cash flow to keep a handle on your capital situation. Make cuts if you need to, and track all of your expenses carefully with an eye to where savings can be achieved.

The earliest stages of a startup’s growth are the time when these types of problems are most likely to occur. Nevertheless, even if your company has been around for a couple of years it doesn’t mean you’re out of the woods. Keep an eye on your numbers. Always.


You’re not doing good business if you depend on a single thing. It could be an experienced and talented employee or a very valuable client. Maybe your company’s success is based just on an environmental condition.

Environmental conditions change. Clients opt out. Employees quit. Being overly dependent on one thing can lead to failure.

If you allow your business to end up in such a situation, you’re setting it up for disaster. Instead of gambling like that, invest in a couple of complementary dependencies and multiple variations.

Neglecting the brand

If you are certain you have a service or product that people really want, never stop working on branding, even if it seems like the product is selling itself. Also, never stop improving it. Your startup will thrive as long as you progress and innovate.

You should work to develop a trustworthy brand that your customers can rely on. No matter the niche – just brand, brand, and brand! The ingredients for a strong brand are the same everywhere. And you may not need a lot. A simple two-color scheme log can get you far. Your brand is the face of your business. Use it to build trust.

If you do a good job, your customers will think of you as a reliable and valuable resource. Use all available platforms to promote your brand. Make sure you have a strong presence on social media.

Competition woes

If you are not careful, your competitors can crush your business. That especially goes if you have not taken the time to analyze and understand the competition properly. Never underestimate the competition.

Often, businesses that revolve around a new, somewhat original idea get too confident. As a result, they neglect to keep an eye on the market.

Competition can be healthy. However, you’d want to make sure you differentiate your company in a way that will make it look like the more appealing option.

Big enterprises also wrestle with competitors. Their main competition mostly takes the form of nimble startups. For instance, new tech startups often give giant tech firms a run for their money.

So, what do the bigger companies do? They acquire the competition. There are plenty of strategies that can help you deal with the competition. You’ll need at least one.

Poor growth speed

An inappropriate growth rate is one of the key reasons behind most business failures. But, here’s the catch: most startup owners read that as “not growing fast enough.” That’s a common mistake. Growing too fast can also cause problems.

Slow growth can mean spending lots of cash without having the revenue or customers to make up for it. Growing too fast breeds different issues. In that case, customers may have inconsistent experiences, employees may become overworked, and demand can become too high.

Work closely with every department, but especially your HR department and marketing team. That can help you achieve steady growth.


Remember: even if some things are out of your control, you’re still the captain of this ship. But, you’ll need more than ideas. You need a plan. With these dangers in mind, work together with your team to develop a blueprint for success.


Anna Stinson is a tech writer and researcher interested in startups, web development and business innovation. She is passionate about motivation, self-development and yoga. A recent hiking enthusiast, she enjoys exploring new trails and breathtaking views. Twitter profile: https://twitter.com/anna_j_stinson

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