© 2011 Apptivo Inc. All rights reserved.

Five Reasons Why Small Businesses Fail

Posted on December 7, 2011 by Usha Prasad

Just wishing to become successful doesn’t show any result. It requires a reasonable amount of

planning and commitment to succeed in any field.

When you plan to set up a business, failure is the last thing on your mind. If you are a start-up or

a small business owner, you will never see your business fail if you have laid out a well thought-

out business plan and set your goals right. Most small businesses did not succeed because its

owners failed to put in their efforts.

Let’s find out what are these reasons that lead to failure of a business.

1. Starting a Business Without any Focus: Many small business owners set up a business for

wrong reasons without any focus on what they want to do and achieve.

Starting a business for the sake of doing something,will lead to a disaster. Always, ask yourself

why do you want to start this business? If you answer why you are setting up your business, you

have made a beginning on the right track.

2. Lack of Proper Financial Planning: Not having enough financial backing spells a doom for

any kind of business. You might have a proper planning, infrastructure and human resources in

place, but if you don’t have the capital money, your business will boomerang as soon as it began.

© 2011 Apptivo Inc. All rights reserved.

Strong financial back-up not only enables smooth running of your business, it also helps you

weather some tough times.

3. Bad Management – Managing a business – big or small – is not all that easy unless you are a

better manager. When you are a small business owner, you should be more focused on properly

managing your business – administration, human resource and most importantly, finance. As a

start-up or a small business, you should be wise and careful in every step you take and every

penny you spend. If you know how to manage people and the finances, your job is easily half

done. Hard work and best management practices are the stepping stone to any successful

business.

4. Expanding too Quickly – Who doesn’t want to grow big and succeed in a business? Well,

short cuts to success always land you in trouble. As a small business owner, you should have a

well thought-out business plan, and aim at growth and expansion in stages. Trying to race ahead

will only lead you into a financial mess, leading to losses. Plan your finances better so that you

invest wisely in the company’s growth. Do not rush to expand unless you are firmly grounded

and have all the bandwidth and resources to expand.

5. Poor Marketing Strategies – Marketing is an important element for the success of any

business. Most aspects of your business depend on successful marketing. When we say

marketing, it also includes other aspects such as advertisement, promotions, branding and public

relations. Your business – products or services – gets noticed only when you create a buzz. Focus

on best marketing practices and brand building. Hire best marketing talents and seek advice from

a branding expert. See the value of going beyond mere slogans.

Focus on the above mentioned basic points,put in your best efforts and you will be in the best

position to succeed.

If you are an entrepreneur or a small business owner, feel free to share your experience on how

you avoided failure in your business, and also share your success tips. We look forward to your

valuable comments and feedback.