There are numerous reasons to why your business start up may or may not succeed. It is true that around 80% of start up businesses fail within their first year of operating. Listed are five reasons to why a business could fail and how to prevent this from occurring.

1.       Poor Business planning

A strong realistic business plan builds the foundations for a business. Business owners often get over excited at the prospect of their own business coming into fruition, so excited they fail to take the necessary steps to ensure success such as aims, objectives, financials and strategies. This process is vital to the success of your company.

2.       Insufficient Funding

Funding is an essential factor when running your business. Many businesses overlook the fact they need enough money to sustain their business. Funds should not be withdrawn until you start seeing progression in the business you need to keep recycling your cash to make it stable and secure.  To prevent this, envisage the future and what avenues you are going to pursue, for example set up a 12 month plan and look how you are going to expand, noting the costs along the way. Professionals can help aid you with this, although expensive you will find out its worth it in the long run.

3.       Not being Familiar with “The Industry”

The most common reason for new businesses failing is the lack of research going into the industry; also ensure you have the sufficient amount of experience for the industry. Without this practical knowledge and experience you will be unable to succeed, a client will not just come to you out of thin air, you have to go out there and grab their trust. In order to achieve this networking is a crucial component; to secure a client you must attend conferences, seminars and meetings.

4.       Poor Marketing Strategy

Poor planning and execution of the marketing strategy will ensure failure. Marketing is vital to any and every company because it is how you sell your business to others. Many companies just spend money on advertising without any real planning or strategy, no direction, identifying your market is of paramount importance here. Focus on the product/service you are providing for example branding, positioning, where it is going to come in the market. Spend money on devising a plan and acquiring research, having a stab at the market will result in failure.  As always it is about grabbing the consumers’ attention.

5.       Lack of Competent Employees

Competency is vital to your business succeeding. Without competent workers how will a business succeed, they need to be as talented and passionate as the next. Keep your employees happy and well motivated to ensure they put hard work into the business. Careful monitoring of an employee will ensure progress and the full completion of the job in hand. This comes down to recruitment; many companies learn a valuable lesson in recruitment early on by employing the wrong candidate. Make the application attractive to their eyes and the best will want to work with you.


To conclude, vital steps must be taken to ensure the success of your start up business, planning being a paramount factor. Taking these points into consideration will increase the likelihood of success and a well researched stable growth plan, can help make success a reality.