from our blog

This Is Why Businesses Fail and How to Avoid it.


Starting a business is a very popular career choice these days, especially amongst Gen Zs and millennials. It is driven by passion and fueled by a heck of a lot of planning. It is most definitely not an “easy way out” of the corporate world as many seem to think. In fact, it is anything but easy, having to work twice or more than a 9 to 5 job, through nights and weekends. Also, while you’ll come across ample examples of success stories, there is not a lot of information from around the world for why businesses fail. Yet globally, there are roughly 305 million start-ups created EVERY YEAR! Can you believe that?!

With that whopping number in place, can you take a guess at how many of these businesses actually make it through the initial phase filled with challenges and shine beyond?

Here’s another interesting stat – 9 out of 10 start-ups fail. And most of them fail within the first 18 months! Isn’t that INSANE? So many different ideas, so many young minds working on them, there is no shortage of audience you want to target these to and the platforms to be able to market these products or services are plethora. And yet, businesses across the world are failing time and again.

There could hundreds of reasons for this, but we’ve put together some of the most common reasons why businesses fail and how you can work around them. Keep reading.


This is by far one of the biggest hurdles for any business, let alone a start-up. As a business owner, it is imperative to know exactly where your money is going – payroll, rent, utilities, vendor payments are only some of them. If you aren’t in sync with your finances, there will be a huge disconnect in operations.

Another reason to consider is profit margin. Are you pricing your products or services at a lower cost to get an edge over your competitors? It is alright to do but not at the cost of running a loss. It defeats the purpose of the business, unless you’re running a charity, of course.

SOLUTION: Ensure you know exactly what your expenses in the company is, down to the penny. Understand the profit generated through sales. Price your products or services at a cost high enough that you are making profit, without losing your competitive edge. Hiring a knowledgeable bookkeeper will help you stay on top of your finances and eliminate the chance of errors piling up to result in bigger losses over time.


“The best leaders realize their success depends on their people.”

John C. Maxwell

Any organization is a reflection of its management and leadership. There are various red flags with a weak management that can be caught early. Owners with lack of experience managing a team or a company, unstable decision making, micro-managing teams are some of them. This creates a very unhealthy and unproductive environment, not just affecting the team but the entire growth of the business.

SOLUTION: Invest in educating the management. Conduct periodic trainings to improve soft skills because they are just as important as technical skills. Working with an experienced business coach or mentor is a great way to enhance knowledge and skills.


Hiring people for your team is not as easy as going to a grocery store and picking what you want. It’s more than just bringing together professionals from different backgrounds.

Recruiting the right people is more than half your battle won. The wrong ones will literally collapse your business. While the right skill set for each role is necessary, it is not the only thing. One of the most important elements, often ignored, is people being a cultural fit. If they don’t fit in, they’ve got to be out!

SOLUTION: Read our blog about how to set up your team to know what to look for. If you don’t have a recruiter on your side, work with a staffing agency to help with hiring your team. They will be efficient with getting you the exact kind of people you are looking for and save you the man-hours it takes to sift through hundreds of resumes, and screen and vet candidates until you can shortlist the ones that are a perfect fit.

Alternatively, if you’re on a financial crunch then working with a business cultivator is a great option. You’ll be provided with a full fledged team of experts that you can hire on a need-to-use basis. Learn more about our Cultivation services if you are unsure how that works.


This is one thing we see across ALL small businesses and first-time entrepreneurs and is a huge reason why businesses fail. Their passion drives them to be involved in every single granular aspect of the business. And while, there is nothing wrong with that, it is not always practical and leaves you with very little time to give attention to the bigger picture. To setting the growth expansion plans into motion for the business. Besides, trying to control everything and micro-managing isn’t the most efficient way of working.

SOLUTION: Delegate. Either hire a team internally and handover responsibilities or get flexible team for certain areas of your business where you see that you are struggling. Flexi-team support also allows you to use the full or just part of the team on a needs basis. Need a bookkeeper for just a month? Need a full-fledged team that handles everything? It’s all possible. It’s just a matter of accepting that you will trust someone else to support you and take the first step into implementing it!


Small company or large, start-up or been in the race for a while, there is no debate that marketing is crucial. You have got to do it. And you have got to do it right. Did you know that 14% of all small and medium-sized businesses fail due to poor marketing?

A lot of companies tend to underestimate marketing and its budgets. They try to cut corners to “save” money. But in reality, what they are doing is stunting the business’ growth. This is especially common amongst small and medium businesses. It is also necessary to have an effective marketing strategy in place that works in tandem with the brand. Ineffective strategy is as bad as no strategy. It is a wasted effort with no outcome or worse, negative repercussions.

SOLUTION: Invest in a strong marketing team that will bring to life the brand and companies’ vision. Find the right marketing drivers that understand the brand and product or service extremely well that will create and drive campaigns tailored to your needs. Never underestimate marketing budgets; this is what is going to take your brand to the audience, which will be a crucial step in business growth.

Evolve is a business advisory that helps small and medium sized business and start-ups to push their business forward, by providing team support, business coaching and office space and more. Contact us at +1 (905) 257-9696 or