Why do some businesses fail even with a good business plan?

Why are businesses failing?

Kamran Karim
4 min readAug 12, 2022
Photo by Luca Bravo on Unsplash

There are many reasons to fail in business. There are a lot of companies, and every day many businesses are failed for some reason.

If you have covered this reason, then you will increase your business success.

The Small Business Administration (SBA) released a statistical report on the low business failure rate in 2019. 20% of companies fail in the first year, and 47% do not succeed in the next 5 years; only 33% survive up to 10 years.

Thousands of businesses are created with a plan, but they also fail while business is done on perfect ideas.

If you have an appropriate plan to solve these issues that can drown your business, it will be easy to improve your business.

The following are some of the factors that describe the company’s failures.

Poor Planning

If you do not plan perfectly to start the business or how many investments they need, you have no chance of picking up your startup.

If you do not know the targeted business competition, your start will be affected, and running your business won’t be easy.

First, you have to plan your whole idea where you can start, how much money you need, and how many years are taken to be in business. Estimating everything and making a good plan is the first step to success.

Bad idea for a business

Many businesses start with a weak idea, and no one will advise; the business idea is not good, which is one of the common reasons most startups fail.

If the business is risky and has no chance of growing, you don’t have to work on this plan.

Businesses that failed due to poor financial management

A perfect business plan will be failed if financial management is not excellent. Suppose you do not have financial knowledge of how to handle business finances, manage employees’ salaries, and how much money you have to invest.

If that happens, it will be one reason why a business fails… You will need to make financial management software or hire a professional financial manager to teach you financial knowledge.

Lack of funds

One of the leading causes of unsuccessful business is the lack of investment. Starting or running a business will be hard if you do not know how much money you need for a business budget.

With Lake of Budget, investors will be disappointed with decreased company and not invest in your plan. Without a budget, you will not have employees, you will not have investors, and the business will fail automatically.

Lack of management performance

Good management is the best part of the business that helps to increase the business with an adequate sequence.

If you do not have a manager or good management team to manage your product, customers, reviews, and other mandatory things, your business will begin to fall.

Untalented Leaders

The talented leader is responsible for leading and working — many startups fail due to weak management.

If the leader cannot lead the team, does not make appropriate decisions, and does not run their all works correctly, then his effect will face the company.

The leader must deal with all challenges and dedicate himself to responsibilities there.

Not listening to customers.

When you start the business, you need to make customers priority and their satisfaction. If the customer is satisfied with your product and your quality, he will come back in the future and also send your company to friends and family circle.

If the customer is unsatisfied with your product or service, they will not be returned. They will also give you a bad review online, affecting your future customers and impacting your sales, which will be why small businesses fail.

Creative thinking and new ideas

What makes you unique? Creativity and innovation in your work will make you unique on the market. If you do not analyze your competitor and use old product styles, you must have the chance to get out of the business. You must research your competitor’s and customer’s needs and then do the work better than others.


Here you find some main reasons for the failed businesses and some solutions in this article. If you control these main reasons, you will grow Fastly. Many entrepreneurs ignore these reasons and then face failure. It is better to prepare ourselves, and you will not face failure.



Kamran Karim

Inspirational, Futuristic & Innovative | CEO of The Binary Geeks & Yachtefy.com | Author of “What to Expect Before Developing an App.” kamrankarim.com