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Top 5 reasons why businesses fail

Top 5 Reasons Why do Businesses Fail?

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Failure is not something that should be in the foreground of your mind while launching your business. However, with a total of 4 out of 10 starts-ups in struggling to make it past the first five years, it is always rewarding to keep a general sense of vigilance towards warning signs. Even if you feel you are doing everything right, the dark cloud of failure may be looming overhead. Thus, by examining the pitfalls of your business, it will become easier to see the drawbacks that may lead to unfortunate failure and deal with such drawbacks and pitfalls in the necessary manner to avoid this sort of a future.

Confused about how to avoid failure? Unsure about where to start examining? Worry not, for we, as a digital marketing company, have curated five common practices which may lead to the failure of your business. Avoid these habits to give yourself and your enterprise a fighting chance of success.

Lack of Proper Strategy

You may have heard of the saying that goes- “Failing to plan in planning to fail.” For your business, the planning of strategy prior to commencement of the venture is absolutely necessary for you to assure success and avoid failure. Long-term planning along with a structured digital marketing strategy is the key that you need to make it for your business.

During charting out the growth of your business, you need to proactively conduct market research to establish who your customers are and what they want from your business. You also need to be well aware about your competitors in the market and be up-to-date with every new trend, so as not to be left behind in the market race.

You need to be proactive about changing customer shopping habits and keep your business up with all such demands. On the flipside, not having a structured business plan will make you vulnerable to the pitfalls of mismanagement. Therefore, it is crucial for you to have a proper digital marketing strategy to maximise your profits, stay focussed on your tracks and avoid failure.


Lack of Appropriate Funding

Running out of financial capital or not understanding what costs are involved in setting up and running a business is a common path to failure that may trap you. In some cases, you may not have enough capital on yourself to ensure a maximum profit turn-up from your business due to haphazard financial allocation at the initial levels of your venture. Therefore, you should understand and take into account the various fixed and variable costs associated with running your business and your marketing strategy should reflect this understanding.

Aside from insufficient funding for your business, not understanding how to manage your cash flow and properly deal with all of your financial responsibilities may lead to disaster. Therefore, cash management and proper financial planning at the initial levels of your business venture is extremely crucial to balance out your cash flow and maintain financial stability.

Financial bankruptcy is a business risk that you want to avoid at all costs. Negotiate across all aspects of your business to manage your financial accounts. Prepare a budget before embarking on any significant move. Talk to digital marketing strategists and business banking experts, if necessary, to provide you with a clearer idea about your financial decisions.

Lack of Suitable Marketing

A blooming business needs a regular stream of sales and customers, and for that, you need a proper digital marketing strategy. For your business to succeed, you need a proper marketing plan and regular promotion of your business on any number of platforms you deem necessary. Based on the nature of your business and your audience base, you need to create a marketing strategy that keeps a stable balance between attracting new customers (acquisition) and holding onto your older, loyal customers (retention).

You do not necessarily require a group of trained marketing experts to help you plan out a marketing model, as it adds onto expenses. Instead, you need to be proactive and indigenous in creating your own unique digital marketing strategy to promote your business in the wider market arena. Relatively simple methods such as having an accessible web page for your business, using social media for business promotion, etc. may help you reach out to your audience base and even attract new customers. You also need to stay vigilant about the marketing strategy, and monitor and measure the result analytics to avoid wasting valuable funds.

Failure to Adapt with Market Changes

Perpetually studying your market and evolving your business in accordance to the changes and trends the market scene is experiencing is a crucial factor that will help you to avoid failure. Stagnancy of your business may lead to dissatisfaction of customers, leading to your business being left behind. You need to be well-researched in the industry and the market you are seeking to launch your business in. Your business is bound to face a number of hurdles- be it changing trends within the market, national or global issues, impact of broader economic issues, etc. Thus, its pivotal to make your business strategy flexible to go along with the flow to be able to maximise profit to your investment.

Try to steer away from rigid plans of actions which do not provide much room for openness and quick modifications as and when need arise. Therefore, to avoid failure, the most important action you can take is to stay attuned to what is happening inside and outside your enterprise and be ready to quickly respond to any sudden changes if required.

Failure to Create an Online Persona

In the present day, the online platform is perhaps the single most fruitful tool that you can use to assure a sufficient return to your investment. While offline marketing efforts do provide a decent return, online marketing efforts can last long-term and require relatively less effort as it can be managed by even a single person. In this digital world, failing to properly make use of all the tools available online is akin to digging one’s own grave.

Make sure your online presence, be it the corporate website or your business Instagram account, are all in sync with each other. Customers reward consistency. Therefore, take special care to ensure that the messaging, tone and overall design of your online presence follows a common pattern across various platforms. Be clear in what services you claim to provide and make sure that your business websites are accessible to your customers. Create appealing social media presence on various platforms such as Instagram, Twitter, etc., to attract new customers. Plan out your digital marketing ideas and decisions. Such practices will ensure your success.


In this article, we have highlighted a number of reasons why your business might fail disregarding the effort you put in. We have also gone a little into detail of how to overcome these drawbacks that you may face, and tips as to how you may be able to avoid your business failing. Warranting the same will surely ensure the smooth running of your business and help you grow and develop it as per your ideal vision. Contact us to know more about the digital marketing strategies.

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