Starting a business from the ground up is no easy feat. While many business empires may have started off from humble beginnings, not many starting businesses get past the first three years. In fact, there is a sad reality that at least 90% of startup companies fail during that early period.

The cutthroat nature of the business is a make or break for many who aspire to venture into the risky but lucrative world of business. But what is it really about starting a new business that causes so many to fail yet leaving others to success, sometimes beyond their expectations?



It takes money to make more money. Nowhere is this logic perhaps truer when you talk about starting a business from scratch. Whether it is capital—which is perhaps the foundation of many companies—or the funds required in maintaining the business, money is basically the lifeblood of any business, even startups.

When the cost of sustaining the business becomes bigger than the revenue it earns during its operation, deficits occur. Consequently, prolonged negative income results to bankruptcy and closure of the business.

Wrong Team

The world is a big place to conduct business with. As your business grows, so does your need for added manpower to handle your business with you. Given the importance of the quality of the workforce in maintaining and growing a business, many startups essentially fail because they are comprised of people who are not competent in sustaining its survivability and growth.

You do not need to build a team based on people from prestigious schools. But you should at least be able to find the roster which is efficient and effective enough with regards to the roles to which they were assigned in.


Poor Time Management

We only have 24 hours in a day. Set in the idea that “time is gold,” every second count in business. Yet, while there’s plenty that can be done in an hour of operating a business, there are also plenty of distractions that hamper your business’ productivity. Many businesses do not succeed because they fail to trim down the inessentials from the essentials.


Insufficient Planning

Many startups fail because their level of planning did not meet the actual effort needed to enact it. Majority of startups, possibly due to being inexperienced, come shortsighted that they overlook to cover the critical bases of running a business such as funding, staffing, development, and skill shortage.

Another common issue about beginner businesses failing is their apparent lack of contingency plan which is pivotal in overturning bad circumstances which the business may encounter along the way. At the worst-case scenario, your business may be doing well one year, only to be turned upside-down. A well-planned business ought to know how to reverse this situation or otherwise survive through it until things improved for the better.

In the unpredictable world of business, optimism alone is not a strong foundation on which a business could rest from.

Weak Co-Founders

Not all poorly conceived teams are blamed on the employees alone. The heads of the company, too, may at times to blame for its bad management.

As the people responsible for some of the most critical decisions in a company, the co-founders of the company should exhibit good leadership and proper management lest the company they built crumbles.


Unable to Meet Up with the Demands of Growth

Making a business grow may be a good thing for any startup, but if the company itself is unable to meet up the demand that comes with its growth, the business will only become overburdened or, worst, less functional.


Unwillingness to Move Past Comfort Zones

Running a business is not necessarily easy. At times, there are certain conditions to consider but are out of the company’s comfort zone. Oftentimes, it is on that “other side of the fence” where the company’s continued survivability rests or growth can be attained from.

Stiff Competition

Unless yours is a business which capitalizes in a very lucrative “one in a million” idea, chances are you will be competing against businesses which offer like products or services. But it is not always just the pre-existing big players who are always the concern. Even future coming businesses are also a worry, especially when they themselves are poised to add to the saturation of the market yours belong to.


The world of business is saturated with companies which offer services that are not too different from one another. While in the industry, it is called “competition,” in reality, making an innovative business that truly stands out often come few and in between. Hence, many clueless entrepreneurs tend to copy ideas of which business to engage and tries too little to differentiate by coming up with something unique and helpful to the society.

But one of the major pressing problems with entering a market supersaturated of the same thing is competing against brands that have already entrenched themselves in the business. For startups, this might imply striving harder to be known and to offer better services and products than the bigger players already in the market.

Yet, as simple as it sounds like, real branding is anything but. After all, it is a procedure which entails sets of processes with a similar goal: to establish a brand that will be a symbol of a particular business.

The absence of Proper Mentorship

You may be a founder of a business who is confident enough in what you had learned from school as a business major, but without the right insight and actual experience in how business actually works in the real life, knowledge about business concepts alone may not amount to much.

Some startup businesses fail because they come far too myopic to actually see the bigger picture and therefore neglect to learn to adjust their play and face competition.

Typically, relevant information such as of this nature would come from people or entities with sound knowledge of how business truly works.


Bad Management

When you talk about group or groups of people working under a similar cause, you refer to established rules and culture which everyone follows. If a startup company does not have a solid grasp as to how its regulations and culture should be like, the company loses a significant part of its identity, more so its integrity as an independent unit.

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