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It’s a question worth asking. Why do so many small businesses fail?

If you already have a small business or you want to start your own blogging business, why not do whatever you can to avoid contributing to the grim failure statistic?

 In my opinion you only fail once you give up completely.  So what if there was an early detection signal that could warn you to take preventative action before this happens?

Think of it a bit like tornado and earthquake detection technology that warns people to evacuate before disaster strikes.

Good news. There is! And it’s something each and every one of us has access to.


reasons and super powers


Let’s first look at the most common causes for small businesses failing:


> Unrealistic goals and expectations

> Poor business choices

> Insufficient start-up capital or cash flow

> Lack of expertise and experience

> Limited or no management skills

> Unexpected growth


The above reasons are no secret. Do an Internet search about this topic and the above comes up, every time.  So if everybody knows what the reasons are, and they can take action to prevent them, why do small businesses continue to fail at such a staggering rate?

Let’s face it, there are probably more reasons that could be responsible that have not been identified. We are also dealing with the drivers behind business, human beings and there’s nothing simple or straightforward about human behavior.

But let’s generalize for the purposes of this post. What if it’s  because people often don’t realize which one or combination of reasons is responsible for their demise until it’s too late?

Well, good news, you do have an early detection signal available to you. A symptom that most of us experience. I know I do.

When you know what it is and can recognize it, then you can use it to lead you to look beneath the symptom, find the cause your business is dying and then take action to address it.

I’m talking about PROCRASTINATION

That’s right. When you procrastinate, it’s possible one of the reasons your business is failing is causing you to stop taking action. Take note this won’t always be the case when you procrastinate but isn’t worth checking anyway?

When procrastination shows its ugly face, view it as a signal of something deeper going on, something you can possibly fix.  When I view it in this way I think of it as my superpower although most would probably regard it as a curse.

The key lies in understanding how procrastination comes about.  Fortunately when it comes to business ventures, it hardly ever causes immediate failure. It follows a cycle and once you know what this is you’ll be able to recognize it which will trigger you to take a step back and find out what preventative action to take next. 

Let’s have a look at that cycle:


1. The Eager Stage


why do so many small businesses fail


Whenever you start something new like a business, it promises to change your life for the better so you feel eager and excited.

You experience high hopes and optimism. You may be so excited you tell all your friends and family about your plans, about how amazing it’s going to be when you ‘make it’.

This is like the honeymoon stage where everything seems to be sweet and promising. How could anything go wrong?

As long as you take maximum and consistent action while you feel like this, you’ll create the motivation and momentum required to get going, but you only have a limited time to do it.

Your emotions are always changing. The word,’emotion’ contains the word ‘motion’, meaning movement.

Wait too long and the excited feeling starts to wear off. If all you’ve done is enjoy the feeling and you’ve taken no action then before long it’s likely you’ll move on to the second stage.



2. The Dodge Stage


why do many small businesses fail


You’ll know you’ve reached this stage as you’ll no longer feel quite as eager or excited, especially when it comes to taking the actions to move your venture on.

You may even start to feel quite the opposite of excitement – doubtful, fearful or a common one, “I don’t feel like it”.

Every day you’ll promise yourself that you’ll do some work on your business but in reality you’ll start to dodge or avoid doing what needs to be done. One day will become two, a week and more…

If you’re able to identify when you’re at this stage then it’s time to consider whether one or more of the reasons why businesses fail applies to you and your business. If it does, take action to address the cause and the symptom of procrastination will disappear.

If you don’t, then you’ll be  well and truly entrenched in the second stage, dodging what has to be done, and it won’t be long before you find yourself at the third stage.



3. The Justification Stage


why do most small businesses fail


If you’ve told others about your plans, it’s about now they’ll start asking you how it’s going.

Even if you didn’t tell anybody else, your mind will step in and ask the same question of you.

Of course you’ve been dodging what needs to be done so you’ve not made any progress. The easiest way for you to legitimize your tardiness is to justify why you’re not further along.

“I’m still learning what to do so it’s still a bit slow.”

” It’s been too cold to get up early in the morning to work on things yet.”

However, there’s nothing legitimate about any of it. You’re simply making excuses.

Are you able to wake up and identify the reason you’re procrastinating? If you can then you’ll be able to stop it.

If not, you’re on your way to giving up as you move to the last stage.



4. The Blame Stage


many small businesses fail first year


The reason why this is the last stage is that the moment you blame someone or something else other than yourself for failure, you’ve given away all your power and there’s no turning back.

“It’s my partner/ wife/ mother’s fault.”

“The economy’s not right.”

“It’s the website’s / bank’s fault.”

Now you’ve made your success dependent on someone or something changing. The problem is you have zero control over whether that person or situation will change. Since you can’t control conditions like these, the next step will be to give up completely.

Once you do this you’ve just contributed to the staggering number of small businesses that don’t make it.



why do so many small businesses fail? 


It’s not a simple question to answer. There are some common causes as I’ve identified. There are no doubt more I haven’t.

For most businesses in trouble there are warning signs. If you are aware of these and can respond, taking preventative action in time, then you stand a chance of saving your business.

Procrastination is one such warning sign although it’s not the only one and won’t always be the symptom you need to heed.

But what if is and it helps you save your business, wouldn’t it have been worth it to check?


Got Questions? Something to say? Leave a comment. Let’s chat

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  1. Anne Saxod

    Thank you, Mark, for this article. Every year I read the statistics about how many small and middle businesses unfortunately failed. It makes many people postpone their wish to have an own business for fear of money lost and an enormous amount of work coupled with less insurance facilities. Getting older doesn’t make it easier, but sometimes due to the circumstances, one is just obliged to jump “in the cold water”. I haven’t met so many people creating a business by passion. Probably a mindset given by the surrounding society. I believe curiosity and support are essential. To have a coach would be nice, but doesn’t it cost a lot ?


    • Mark Baker

      Hello Anne,

      I think all too often, people are not really prepared for what it means to go into business. We live in such an “instant type” world that many expect being successful in business can happen the same way.

      I love how you mentioned curiosity being essential for aspiring business entrepreneurs. So true. One is to continually be ready to learn and to test one’s learning through application.

      Coaches can be pricey, especially the good ones, but I guess if you have the budget, the support may be worth it. Fortunately there are also a lot of really helpful people in business online who are happy to be informal mentors. I guess this is why networking and reaching out to other business people is so important.

      Thank you for leaving such a thoughtful comment Anne.



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