Learn the Top 20 Reasons Startups Fail

top 20 reason startups fail boutique business hub

Are you curious as to why do small business startups fail and learn how you can avoid them?

As you can see, market need is the #1 killer for small businesses. Therefore, there is a huge need for you to target your niche market accordingly to keep a stable, profitable business. 

Read more: https://www.cbinsights.com/research/startup-failure-reasons-top/

  1. No Market NeedTackling problems that are interesting to solve rather than those that serve a market need. 
  2. Running Out of CashMoney and time are finite and need to be allocated judiciously. The question of how should you spend your money is a frequent issue.
  3. Not Having the Right Team in Place. It's neccessary to have a diverse team with different skill sets to be successful as a business. With sole propreitorships, sometimes not having the help of a team can work against you. 
  4. Getting Out Competed. Obsessing over the competition is not healthy, but you can't ignore them. Checking out the competition from time to time is necessary to see what's trending and what people in your target market are interested in. You can also be out competed in quality, marketing, shipping time and more.
  5. Pricing and Cost Issues. Pricing is a dark art when it comes to startup success. There is a thin line between pricing a product high enough to cover costs, but low enough to bring in customers.
  6. Poor Quality/Non User-Friendly Products. 
  7. Lack of a Business Model/Plan. The main point of a business is to grow. You will need to plan and set goals in order to accomplish this. When you plan to fail, fail to plan.
  8. Poor Marketing. Knowing your target audience and knowing how to get their attention and convert them to leads and ultimately customers is one of the most important skills of a successful business. But an inability to market was a common failure especially among founders who liked to code or build product but who didn’t relish the idea of promoting the product.
  9. Ignoring Customer Requests/Bad Customer Service. Ignoring users is a tried and true way to fail. Tunnel vision and not gathering user feedback are fatal flaws for most startups. Survey and ask customers what they want to see from your brand and answer all customer questions via email or customer service.
  10. Product Mistimed/Mistiming of Product Releases. If you release your product too early, users may write it off as not good enough and getting them back may be difficult if their first impression of you is negative. And if you release your product too late, you may have missed your window of opportunity in the market.
  11. Loss of Focus/ConsistencyGetting sidetracked by distracting projects, personal issues, and/or general loss of focus can be a reason that a startup fails.
  12. Issues within Staff and Investors. Sometimes a partnership starts off great with everyone is on the same page, however, things can unfortunately go sour in business. This reason sucks, but when staff or you and business investors have disagreements, sometimes the business can suffer because of it.
  13. Pivot Gone Bad/Misstep into Wrong Direction. When pivoting, or taking your brand in a new direction, be sure it was calculated and heavily researched before action. 
  14. Lack of Passion. Passion has to remain high throughout your business journey. It is easy to lose interest in routine, so be sure to evolve your brand as well as evolve in your life to keep your mind and money motivated.
  15. Bad location (brick and mortar). Location is everything, but we understand rent is also. You should search for a happy medium between high traffic and reasonable rent. *The further away you are from prime locations, the more you will need to spend on marketing.
  16. No Financing/Lack of Money. Running out of cash is more common than you think, even when making sales. Don't be afraid of investors, but we recommend starting with business grants that your don't have to pay back. 
  17. Legal Challenges. Don't skip the legal filings for your business. Read all disclaimers and requirements to prevents suspensions and spending more money. Learn where to get your business legal.
  18. Lack of networking and business coaching. Not using resources already provided or connecting with similar business and advisors.
  19. Burnt Out. Work-life balance is not something that startup founders often get and so the risk of burning out is high.
  20. Failure to Pivot. Not pivoting away or quickly enough from a bad product, a bad hire, or a bad decision 


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