Top Reasons Businesses Fail

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Since creating my mobile apps that help people plan and start their business, there have been 250,000 people who tried to start businesses on the apps. I have observed a number of common patterns that is repeated by first-time and experienced entrepreneurs which cause their businesses to fail. In this article, I will go over some of the top reasons why businesses fail.

Businesses Fail Due To Founder To Business Idea Mismatch

The single biggest reason that businesses eventually fail is something I call a business idea to founder mismatch. That occurs when the entrepreneur is not the right fit to start that particular business. It may be because they have no prior knowledge or experience in that particular business niche, or possibly because they have little passion or interest in the field.

Here is a video explaining how to get business ideas that are right for you.

Businesses Fail Due To Underestimating How Difficult It Will Be To Start A Business

Starting a business is extremely difficult. But many people don’t realize just how difficult and demanding the process of creating a business will be. To rephrase things, starting a business is very easy. But actually making that business a success is extremely difficult. After starting, the typical entrepreneur must work long hours, almost seven days a week. It may sound like an exaggeration, but the amount of things the founder has to do simply never ends.

Businesses Fail Due To Lack Of Finances

Nearly all entrepreneurs face the money issue. It is maybe more accurately described as the lack of money issue. There are many options to do fundraising for your business, but none of those options are easy. Plus, they all need time and effort devoted to them. But in the end, if the company doesn’t generate money either by an investment, grant, loan, donations, or through its own revenue, it will not be possible to sustain. If you are raising money, here is a video tutorial with a number of different fundraising ideas you can use for your business.

Businesses Fail Due To Improper Planning

As entrepreneurs, we get very excited about our business ideas and often dive right in. But, of course, planning the business is a necessary step. In fact, like with anything else, you shouldn’t just plan. You should plan well and make sure that the important parts of the overall business model make sense and will work.  The term business model is one that is often confused.  Here is a video explaining exactly what a business model is, and why it is so important.

Before you start, make sure that your business plan and the business model truly make sense, and are solid. It is far better to fix problems in your business strategy during the planning of the business rather than having to fix them after the business has been started.

Businesses Fail Due To Bad Business Partners

Make sure you have great business partners of co founders. If in the middle of running the business you discover that you can’t get along with your business partners, that can be a very dangerous thing for your business. In fact, fighting and disagreements between the founding members of a new business is often the cause for that business. Here is an article with tips on what to look for in your business partners. And here is a video on how to find business partners and co founders.

Further Business Resources

For more business-starting resources, please take a look at our business planning mobile apps. Here is the iOS business plan app and here is the Android business plan app.  Additionally, here is the iOS fundraising app. And here is the Android fundraising app. And here are our business apps on the Kindle. And here is an article where I give the argument that our Android apps are the best business apps on Android.

And please check out and subscribe to my YouTube channel where we cover many marketing topics.

Author: Alex Genadinik

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