In this short article, we will be discussing the key reasons why small business start ups fail.

Welcome once more to our site, Legitideas your number 1 financial advisors. Giving you ideas that will make you succeed online.

Have you ever wondered why small businesses fail unlike the big ones? Have you ever tried knowing how these big companies came to be where they are today? Have you ever imagined if it’s possible for a small business to get to that height?

Or do you think it’s possible for a small business to grow big? Do you think that a small business can meet to the standard that it requires to get to where these big companies and business are today?

Have you ever imagined if any small business you know out there can grow like the big ones.

Big ones such as the likes of

• Amazon

• Meta

• Longrich

• Alibaba

• AliExpress

• Mung hills


And all the big businnesses out there that you know.


If you observe keenly, you will find out that it seems as if big businesses keep going big on daily basis (every day) while small businesses keep going doing every minute and every hour. Right? Yeah, it seems so at least 70%.


The truth here is that no online business started big. They never all started big. They started small and we’re pushing on with the demands of the business until they get to where you see them now. And there alot of reasons small businesses fail.

For example, until Jeff Bezos became the richest man in the world, I never knew about him and his industry. Yes he has been operating since but it came to live’ when he decided to bring his business to the peak in all the earth. And you know what that means. Every business man will wish to be the richest or among the richest some day in life.


All small businesses dream of becoming big one day. Yes they do!


No one wants to remain small even though there are reasons why some of these small businesses fail

But the problem and the reality is that most of them remain small and some of them even die off within the first two years of establishment.


Infact in the business statistics, upto 60% of businesses die before their first five years of establishment.


The question is why?

Why do small businesses die so soon? Why do small businesses cease to exist after their first few years or even on the first year of establishment? What are the reasons why small businesses fail?

In this article, we will be discussing the major reasons why small businesses fail and the reason why businesses fail at start-ups.


These reasons small businesses fail are not hidden or hard to fetch, they are just open and common in the downfall of every small business.

If you are into a business or intend joining one and you don’t want to fail then consider going through this article very well, find the faults in your business and awaken it right away.



Reasons Why Small Businesses Fail, especially at start-ups

Top reasons why small businesses fail
Reasons why small businesses fail


These reasons are;




Lack of proper planning is the first among the reasonss smallbusinesses fail.

Nobody can set into a business with the aim of succeeding without planning. Before you can succeed in any online business, you must have decided to map out your plan.

Why small businesses fail as a result of lack of knowledge
Lack of knowledge has killed and is still killing alot of business online

Most small business fail because of lack of plan. They never planned well before taking action in starting their business.

Some of them do not even have business plan. For any business to succeed, they must have a set business plan.

It is this business plan that will enable them succeed as they will walk towards achieving the plans.

These plans must be written down and must be pursued to achieve success and go big and grow bigger.



Another part of the reasons why small businesses fail is as a result of lack of professiona advice.

Yes, in every fields there are professionals. Any business that you intend starting you must get to know the professionals in the field.

No matter the level of knowledge or skill you have in a business, no matter how informed or how learned that you are, it is still relevant and pertinent that you should seek professional advice.

You need a mentor, someone that is more than you.

You can’t start a business like most business people do, starting because you see people prospering and succeeding in the same business.

You must ensure that you have a mentor who is a professional in that field to mentor and guide you through.

Even too businness men like Bill Gates has Warren Buffet as his mentor. What about Sir Richard Branson, he also has a mentor being Sir Freddie Laker.

Imagine all these top business men still having mentors, that means for any small business to expand, they must have mentors and role models who are professionals in the exact line of business as theirs or their intending line of business.

This lack of seeking professional advice has really killed a lot of small businesses.



Imitation or copying others. This is another of the reasons why small businesses fail.

Copying: A reason why small businesses fail
Instead of just copying others. Try to edit them and make yours unique in other to avoid copying: a reason why small businesses fail

Many people have gone into a particular business because they see people doing it. And this is one of the problems with small businesses.

They forget to know that what goes well for Mr. AB may not work at all for Mr. BC.

That Mr. AB did it and succeeded or is still doing it and succeeding does not also mean that Mr. BC will succeed if he tries same businness too.

For a business to strive and grow, you must try to bring and add your own ideas to the existing ones so that you can succeed.

Check and study what others are doing out there and then strive to do yours in a better way, a unique way that will distinguish you from others and help you to explore.


Imitation leads to limitation. A reason why small businesses fail
This quote by the C_E_O of Legit Ideas explains it all. Imitation leads to Limitation

Avoid the idea of imitation; the act of imitating or copying what others are doing. But rather make research and consultations and come up with your own ideas that are unique and strategic.



Luckily for you, here in Legitideas we give you ideas that will help you stand out among your competitors and be unique”

Avoid this act of imitation as it has made a lot of small businesses to fail in the past and is still making more to fail.



Another of the reasons why small businesses fail is as a result of lock of proper knowledge and experience.

This alone constitutes to 40% of the reasons why small businesses fail. This is because, it is the basis on which whether you will succeed or not lies upon.

Lack of knowledge and experience is one of the causes why most small business fail. And it is not just one of the causes but one of the prominent causes.

Lack of knowledge has killed a lot of small businesses
Knowledge is power. But knowledge remains powerless until you act.

Before you can succeed in any business. Infact before you can start any business at all, you must study the business very well, get full detailed knowledge of what the business is all about. Without this there is no technique employed that will help you Excel.

If you are inexperienced or your management is made up of novices, then your business is as good as dead. Yes it is!

So when starting a new business, whether online or offline, it is advised that you get the services of people experienced in that field.

You watch and study them carefully to know how they do it, ask questions and then implement it in your own business and watch it grow.

Also get experienced marketers and well-trained customer service personnel because Experience counts in everything.

Don’t just rush into any business just like that without Experience.



Your language to your customers matters a lot. The way you present your business matters a lot. The way you also interact with your customers matters a lot.

Many small businesses lack good customer care and this has made them to loose a lot of customers and clients, both new and old ones.


It is very important that you make your customer care a priority. A business with good customer care grows.

Learn how to handle and attend to you customers because good customer care brings return customers and return customers bring referral customers. If you do not treat your customer well, they go to your competitors. As simple as the logic is.

Try and learn to show your customers that you appreciate them. You can also conduct simple sureveys to get to know their minds and the way you can serve them better.

Always ask them questions about the product and offer them some percentage when they give your product a review (either positive or negative review). Offer it to them to keep them happy and keep patronizing you.

If you are not close to your customers, if you treat them like every other seller, they will only come when there is no other option. Bad customer care has killed a lot of businesses.

Don’t allow it to affect yours too if you really want to succeed online.

Treat your customers the right way so as not to loose them.



What is your growth measure? Do you bring new ideas with the aim of growing your business?

Unfortunately and so sad to hear, most small business has failed as a result of inability to device new ideas. Ideas that will help them grow in their business.

There is a difference between just devicing and bringing in new ideas and bringing in strategic ideas.

Strategic ideas are compelling and persuasive techniques used in getting the interest of people to patronize your business.

Strategic ideas can be in form of discount sales, bonus on purchases, special offers, giveaways. Although giveaways is not actually a way of getting more sales because it does not actually keep customers. But you can do it in a strategic way.

Imagine bringing up an offer,

Buy 6 and get 1 free

Buy 10 and get 2 free

Sometimes the above Strategy can be used to get customers on the short run.

People fail a lot in business because of greed and lack of contentment.

You just have to put them away, create strategic offers that will bring you customers and then use other strategic ideas to keep those products.

One thing about the failure of small businesses is that they want to follow what others are doing.

If you must succeed, then check what others who are in the same line of business with you are doing, then craft something more attractive and appealing than theirs and watch customers come your way.




The word FOCUS simply means

concentration of attention on a particular dimension.

In business, Focus here means getting concentration on your business.

Entrepreneurs or business owners are easily distracted by so many things even things that are just minor. Putting their focus on things that do not comply with their business and leaving their business behind.

A person without focus can never succeed in any form of business. This has been a form of havock and has led to the fall of many business out there.

As an entrepreneur, if you must survive and expand from the small business level to a bigger one, then you must be ready to Focus seriously on your business.

Avoid unnecessary distractions, not even from friends.

Remember, friends won’t fees you comfortably, you gats to strive for the mastery. Focus on your business for expansion and growth.




Yes poor funding. Many small businesses have fallen as a result of poor funding.

The English dictionary further explains fund as;

“A large supply of something to be drawn upon.”

This simply means that, funding is required in a large amount.

Some Entrepreneurs find it difficult to invest in their business thereby leading to failure.

Funding can come in three ways

• Pre-start up funding:

This is the amount you spend in the process of trying to start up your business. It is the expenses made in the act of acquiring skills and trying to learn more about the business you are entering into before starting the business.

This stage needs proper funding in order to get full knowledge of the business and to avoid stopping halfway.

• Start ups Funding

This involves the expenses made in the starting point of the business. It is the actual amount you spend in starting your business.

Do you know that giving your time is also part of funding? Yes it is!

Giving your time in your business is a great fund to it because if after spending money to fund your business and at the end you don’t give your time to it. The spent money will just be a waste.

At the early stage, you must find your business both financially and in all aspects.

Although this is not the major problem in the area of funding, but it is the amount used in starting the business that determines the level the business will go

• Running funding or day-to-day funding

This is the fund invested in the day to day running of the business. This is the second most important funding after the pre start-up funding. It is the funding that will determine how far the business will go.





The location of your business will greatly determine how well it will go. Before starting any business, you must consider the location in relation to the kind of business you are running.


You can invest a lot of money in your business as an entrepreneur but your location can bring it down.


Imagine starting a welding business close to an industry or in an industrial area.


There is almost no chance of someone patronizing you.

Or imagine starting a swimming pool business in a village or rural area with lots of waters around. With their mentality and way of reasoning, they will definitely not have time to patronize you when they have Rivers around and you still expect them to pay just to swim.


But imagine creating this same businness in developing towns and watch it boom.




Patience is a virtue and a key. Patience goes with tolerance and patience is the requirement for success putting in hard work.

What is Patience?

Patience is the

Content to wait if necessary;

That is the ability to bear long without loosing out. Even though one might be tired and even frustrated but patience coming in is the ability to endure.

Also patience simply means not losing one’s temper while waiting; but having self control.

Sometimes the business journey can seem frustrating and weakening that you may even want to do transfer of aggression; transferring your anger to your customers. But with the virtue of patience, you can be able to bear it and keep striving to ensure that the business does not fall amidst Huddles.

Patient is the virtue of not being bothered with having to wait. This means not unwilling to wait but willing to wait.

It can be to wait for a short time or even a long time.

Many Entrepreneurs have lost their business. They have watched their business die as a result of lack of patience.

Some can be as a result of their get-rich-quick syndrome; expecting to make it over night. They just want to start their business small and begin to expand and explore immediately.

Believe it or leave it, no big business out there starting without patience. This is because they passed through a lot of discouraging moments but they fought hard. They were patient enough to keep funding and investing in their business. Devicing new ideas and Strategies that will enable them grow. And patiently working towards achieving their desired dreams and ambitions.

The flaw and fall of many Entrepreneurs is impatience. They don’t have patience, once they see their business not going on the way they planned or expected, they easily feel discouraged and tempted to quit. At the end most of them quit instead of devicing strategic ideas to grow their business with Consistency.

“Suggested for you to read; Business Growth Strategies (Consistency)”

Say no to easily quitting!

Say no to lack of endurance!

Say no to business failure.



All these are the major reasons why most business out there fail. Yes, the reason why they fail. Sometimes you just hear how small businesses are failing and falling without revealed reasons, and some also give non satisfying reasons. But these are the things that have been leading and is still leading to the failure and falling of many small businesses out there.

What could be the remedy;

The remedy is simple as this; having gone through the article very well and have discovered this reasons then you act on the opposite side against this reasons.


1. Ensure that you do a proper planning before venturing into any kind of business at all. Know what others are doing. Draft your business plan and work towards it.


2. Always seek for professional advice from those in the same line of business. Get mentors and role models who are in the high class as professionals in that same business.



3. Avoid imitation. Do not always copy what others are doing but try to do something better than that.


4. Get full knowledge and Experience in any business before starting. Ensure you fund your pre start-up stage very well. Learn everything about the business, attend classes, read books and buy courses on the business to get full knowledge of it so as to avoid failure.



5. Learn good language and customer service. Attend to your customers in a warm manner with good language. Irrespective of your look or the fact that you are encountering loss, don’t even make your customers to be aware of it. Avoid transfer of aggression.


6. Bring up strategic growth ideas that will enable you grow. Check what others in the same line of business are doing, do it and add your ideas to it. Use ideas that are better than theirs, place it in a strategic way to bring in more customers and get more sales.



7. Focus on your business. Avoid all forms of distraction. Make sure your business is not lagging behind. Ensure that you are always beating your competitors and that you wouldn’t give them the chance to beat you too.


8. Invest in your business. Make good business funding so as to enable you grow and expand. Remember, start funding your business right from the time you got the idea and started planning for it until your business is strong and at the top you still keep funding.



9. Gets a good location for your business. A strategic place that is going to enable you to grow and make sales a lot. Don’t hide your business or locate your business in a place where your products and services are not required or are required in the minimal. No!


10. And finally, get the virtue of patient. Always be patient irrespective of hard times in business. Be patient and device ideas that will help you move forward.



Having read and known The reasons why small businesses fail and the remedy

“Don’t forget CONSISTENCY is a business growth strategy that you must know and key into it”

Thank you for reading!


You also need to read this; BEST STRATEGIES TO INCREASE SALES IN 2022

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