Some businesses fail in the first year, others after three years while others survive through the phase until they become empires. Are you a recent small business owner who has actualized your dream? Have you encountered challenges so far? Stick around to find out what makes businesses fail so that you don’t make the same mistake.

Founders getting stuck in their original idea

When a business fails, it does so because of the people involved. How many times have you come across an entrepreneur so obsessed with their idea such that they take corrections negatively? Well, some founders want their original idea actualized without any corrections.

Some founders believe that their idea will bring good business. However, you find that after consulting a business expert, they may be required to modify it to make it a viable idea. The funny thing is that they may want to hear none of that and still insist on actualizing it. After a year or so the business fails to the point of closure.

Founders fail because of their ego

Founders believe that they have figured everything out concerning their idea. They will never admit when they are wrong. This is one of the critical things that make the business eventually fail.

The sad thing is that this particular founder may have never managed a team successfully, balanced books of account or merely having a team building vacation.

Poor business model

When starting up a business, it’s all excitement and joy. You believe that your business model will win clients over who will turn into long-term ones.  Having an attractive website which is optimized to meet SEO standards is not the only thing that will bring people to your business.

Analyze what strategies to use to have wholesome, positive results. Ensure that the cost of acquiring the client is not higher than the lifetime value of the same client. Don’t be too stuck in channeling all your funds into getting influencers without putting in measures to expand the business.


How have you planned the financing aspect of your business? Startup owners may have some savings tucked away for the company. However, the money may not be enough, and you may end up looking for alternatives. What makes businesses fail is inadequate capital.

Before starting a business, ensure that you have sufficient funds to operate. Look for other alternatives to complement your savings too. You can take out loans from financial institutions such as BBVA Compass Bank. You can learn about BBVA Compass with this review.

Only take loans if you know you can repay as defaulting could destroy your credit rating.

Hiring the wrong people

The hiring process can be quite physically and psychologically draining. Sometimes, you may even be tempted to have a recruitment agency do the work for you. Regardless of how you decide to hire, you need to be present so that you can get the right fit.

The biggest mistake as a business owner you can ever make is choosing somebody just because their salary expectations are lower than everybody else’s. Hire somebody because you feel they will make the right fit.

Most entrepreneurs fail because of hiring the wrong people for the job. Have somebody who shares the same visions as the company so that they understand and actualize the objective of the business. As such, you have a guarantee that your company has the right people.

Poor management

When choosing a management team for the business, it’s quite crucial to get a strong team that is willing to go overboard to actualize the idea. Nobody wants a team that will immediately leave the office once office hours are over. Get people who are willing to extend if needed to.

A strong management team will come up with ideas that will help the business compete with key players in the industry. They will help you build your empire.

Demotivated employees

Employee motivation is instrumental to how long the business runs. If you are the type of employers who think that they don’t need to offer incentives to your workforce, you are bound to fail. Incentives can be salary increment, regular complements after task completion or actualizing some of the employee ideas.

Demotivated employees will not work satisfactorily, and you are bound to lose. Do regular checkups on them. Encourage them to give suggestions on how to improve the business. Involving them makes them feel valued which turns to productivity.