failed business owner

Reasons That Can Kill Your Startup

Building up a startup business is the dream of everyone who wants to be an entrepreneur. But most of the time, this is where most people stumble and fail. Yes, it would be very fulfilling if you can start your business. But not everyone can succeed in building their startups.

According to a study conducted by the Small Business Administration, every month, over half a million new businesses start. That is a lot! But the data says that within two years, 30 percent of those businesses will fail. Within five years, half of those will close the business for good. In fact, there is only 25 percent that can last for 15 years or longer.

It is kind of scary if you think about it. The business might be doing great for the starting years, but it does not mean it will continue. There is still a high probability that it will fail in the next few years. So, the question now is how to prevent that failure.

A successful business that lasted long years had a great starting foundation. This means that it had the necessary preparations and adjustments right from the start. That is how vital a startup is. It could define whether your business will go for a long time or just die with the others.

Most often, especially new entrepreneurs, make critical mistakes right from the start that results in early failure. It would be great to learn from these, but if you can learn how to prevent it, then much better. We will be discussing what those things that will make your startup fail and stop it from being successful are. Here are some of the reasons that can kill your startup.

Reasons that will kill your startup

Too Many or Too Few Founders

Not every business is the same, and every business will demand differently. A business will require an owner that will oversee everything within the company. As a startup, there will be times that a single owner will not be enough to handle it. In the same way, some businesses would only require an individual entrepreneur or a sole proprietor.

The type of business ownership is often the first issue that will arise within a startup. Choosing the wrong number of business owner or owners will cause a lot of problems. This is one of the most common reasons why a startup fails.

If there are too many owners, then they might not reach a decision as a whole, and this will hinder the process, and the business will not progress. It could also cause fighting among the business owners that will inevitably affect the startup. On the other hand, if there are too few or a single owner, they might not be able to handle the business requirements. They might not have enough resources to sustain the business, and this will cause the startup to fail.

Choosing how many people should be running the business is a critical part not only in a startup but also in an established business. If a leader fails, then the whole business would most likely crumble as well.

Small Marginal Niche

It is common knowledge that there is a business that is already saturated or being dominated by big companies. The type of market structure will always be a big factor on the startup success. Deciding what market you will establish your business can already spell your success or failure.

Because of this reason, many new entrepreneurs become too afraid and choose a market that has little competition. It might be a good idea at first look, but if you dig deeper, this is could backfire. The reason why there is little competition is that there are a small number of possible customers.

If there are few customers for that market, then the chances of you being able to get a sale are also lower. You should also include the fact that not all of them will buy from you. When this happens, the business will not have any revenue and will result in bankruptcy. Just because an entrepreneur chose the wrong target market, the business died just like that.

It is essential to always consider the competition of other business presence in the market. But this does not necessarily mean you have to avoid everything. That is the reason why there are business plans which you can use to execute your process correctly.

Having an Inappropriate System

A startup will need a system to be put in place to get the business going. If you want your business to scale, the right system will enable it to run correctly. A system is defined as the rules, policies, and procedures of the company. That is why this is a critical part of every startup.

If a wrong system is put in place, then it only means that this will result in the business to be in chaos. On the other hand, a sound system will result in higher productivity because there is a clear definition of what tasks need to be done. This will also lessen the time required for each task since there are proper instructions.

But this does not mean that everything in the system will be there and will not change. Remember that in a startup, everything will most likely be on a trial phase. Whatever works will retain and whatever fails will be removed. Don’t get stuck in sticking in a specific system even if there are things needed to be changed.

In times, there will also be a situation where even if your system works, it can be improved. Especially with our technology is making everything more straightforward for us. As an entrepreneur, you should take everything that can help and grow your business. There are available digital business tools that can definitely help your business to upgrade and innovate. It might be challenging to learn them at first, but it will always prove useful in the long run.

Wrong Time to Launch

Deciding when to launch a startup will have a significant impact on your startup. Launching at the wrong time can shut your business off immediately. The timing should be precise when you would open your business to the public.

According to statistics, launching too late has killed almost a hundred times more than those that launched too fast. The number of businesses that started too late is those who copied other businesses because of the success it had. These are mostly people who jumped into the hype of the market. And when the time they started their business, there is a no more available market for them.

The problem with launching a startup too early is that it could hurt the business reputation. Launching too early can refer to starting without proper preparation or planning. If this happens, it would mean you are doing a test with actual customers. If that fails, your business will have that reputation, and it could ruin your startup. A startup will have many trial and error, and this can be one of those.

Whether too early or too late, you are launching at the wrong time can take your startup down quickly. It is always essential to develop a plan and get enough research before starting a new business.

Focusing too much on making money

It is usual for an entrepreneur to want his business to succeed. After all, that is the main goal why he or she did the startup business in the first place. But if you focus too much on that, you will tend to forget the other essential things. When an entrepreneur concentrates too much on money, other aspects of the business starts to fall.

The first thing that is often being affected would be the quality of the product and service. To give a customer the best possible product, a business owner will make sure to use the best possible process and raw materials. If an entrepreneur puts too much focus on making money, they tend to switch to cheaper but fewer quality products. Of course, you will be able to save money from that, but in the long run, it can hunt you and your business down.

Another bad thing would be to not listen to what your customer says. Not listening to feedback is one of the bad habits entrepreneur often do. It is important to listen and cater to this feedback and complains. Use this as a way to improve your product and service. It will surely bring in more customers and clients in the long run.


There we have it; those are some of the reasons that can kill your startup. As an entrepreneur, it would be your job to drive your business to success. Preventing things that can ruin your business should be on your list of priorities. We hope that this article can help you as you venture into business and become an entrepreneur. Do you have other reasons you know that you can kill a business startup? Share it with us in the comment section.