The 3 Major Reasons Why Most Startups Fail

Written by Chloe Harwood

Starting a business means embarking down a treacherous path. You are at the beginning of turning your long held business dream into a reality, and you want to get it right. You have prepared as fully as you can; you have a sound business plan, you’ve made astute financial projections, and you have a clear marketing strategy. All you need to do now is launch your brand, sell your product and work hard to establish yourself within your industry sector. However, 80% of new businesses fail within their first eighteen months of trading. Why is this and what can you do to avoid the pitfalls that so many start ups slip into?


The major reason why it is so hard to be one of the elusive 20% of prosperous and successful start ups is money. Put simply, businesses struggle with cash flow in the initial few months. There are often a lot of overheads that need to be accounted for when starting a business, such as leasing premises, hiring new staff, outsourcing admin functions and purchasing industry specific software to name but a few. If the sales don’t come rolling in quickly, businesses can quickly see their finances spiral out of control.

If you are fortunate to secure the financial investment of a business angel, you can utilize their expertise to mitigate cash flow risks. Otherwise, you may have to turn to other sources for help financially, should you need it. Sites like explain the different sorts of business loans available to startups. By researching all of your options, you should be able to find a loan that is most suitable for your business needs. Knowing how you can access funds should you experience financial difficulty could be the difference between seeing your business fold and seeing it flourish.


If you are first time entrepreneur, you may feel overwhelmed at just how many hats you have to adorn to see your business become a success. You are now the HR manager, the finance director, the marketing lead and the head honcho of your company. The buck stops with you. It is also up to you to clue yourself up about regulations and legislation relevant to your industry. Some people struggle to adapt quickly enough to their new role as an entrepreneur and can see their business fail before it has even begun. Mitigate this by preparing before a business launch and understanding where to ask for advice should you need it as your start up finds its feet.

Online Presence

Every business in the twenty-first century needs to be online. At the very least you need an aesthetically pleasing and dynamic website. Gone are the days of the static, Times New Roman adorned web page. You also need a variety of social media channels chosen from the list found at and a blog. Make sure anything that you post is relevant, high quality and readable. Your content needs to inspire, explain and inform with a distinct voice to suit your brand. If you fail to build a presence online, you are missing out on a huge potential customer base and dooming your start up to failure.

Starting a business is tough at the best of times but by ensuring your startup avoids these pitfalls, you are giving your new business a greater chance of success.

About the author

Chloe Harwood