This is a guest post by Kushal Tomar who is a freelance writer and journalist. He writes extensively in Australia, Canada, Europe, and the US. He’s published more than 500 articles about various topics. 

Many small businesses fail within the first few years for similar reasons. There are many common issues that businesses face and these are the 10 most common.

It is the unfortunate truth that most start-up businesses struggle and fail in their first few years of life. Small-business failure can often be attributed to a number of identifiable mistakes that ruin even the best-laid plans. The following are the 10 major problems to watch out for if you want to survive the first few years of business.





1. Lack of Proper Market Research

Thorough market research is time consuming, but the effort will pay off if done properly. To establish whether or not your service or product has staying power, check that there is high-enough consumer demand to sustain your business and to turn a decent profit.

2. Bad Record Keeping

Paperwork is easy to ignore, but should never be put off indefinitely. Sales, purchases and other expenditures must be carefully documented so that you know what direction your business is heading in. Hire someone that can implement effective management systems for your paperwork if you can’t – or don’t want to – do it.

3. Insufficient Capital

Your business might end up costing you money at first, so it’s important to make sure you can cover your working capital requirement, in addition to capital that is required for furnishings, machinery and stock.

4. Ineffective Marketing

People won’t know that you are in business unless you tell them, so it’s important to have an effective marketing strategy for your new business. It’s possible to promote your business on a small budget, but you have to be creative!

5. Failing to Adapt to Changing Markets

The marketplace is constantly changing and it’s easy to get wrapped up in your small business and stop noticing these changes. To keep from getting left behind, always research what your competition is doing and what the customers want.

6. Overconfidence

Your attitude is important and it can be easy to start feeling like you’re ‘the boss’. Remember, you may run the business, but your customers are the ‘boss’ and you should adopt an attitude that reflects this when you are dealing with them.

7. Mishandling of Revenue

It’s exciting when your business starts bringing in cash, but it can also be tempting to spend that cash on all the wrong things. Especially in your first few years, most of the revenue should be put back into the business to give it stronger legs to stand on, as opposed to buying a new house or car. With excess money, you can improve your marketing techniques, develop an OHS management system, hire more staff or expand your product range.

8. Dependency on Few Customers

Setting up and running a business that is dependant on only one type of customer is a recipe for disaster. Having a diverse range of products or services that appeal to many different types of customers will ensure that your business has something to fall back on if you lose part of your customer base.

9. Too Much Growth

Surprisingly enough, too much growth too quickly can be detrimental to your business. By only taking on work that you can handle, you will be able to more thoroughly satisfy individual customers and build up a solid reputation, rather than spreading yourself too thin and skimping on quality.

10. Doing Everything Yourself

In the beginning, all aspects of your business will fall on your lap, as a limited budget will limit the amount of staff you can have. As the business grows, however, you will have to eventually let go of certain tasks and delegate them to other staff because you won’t have time to do everything. Bringing on an extra pair of hands will cost you in the short term, but will increase your ability to do business in the long term.