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Why do Small Businesses Collapse? Top Reasons for Start-up Failure

What you need to consider when starting your independent travel business or looking for a source of passive income so you can travel the world.

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Why do some small businesses fail and not others? Business failure might not be something that you want to dwell on when starting up a new company but if you want to succeed then you need to take the below points into account so that you can make the most out of your idea.

You’re Starting a Business for the Wrong Reasons

If you start up a business for the wrong reasons then you may find that your entire company suffers as a result. Think about it, do you want to make money? Maybe you think that by starting your own business, you’ll have more time for your family. Either way, if either of these reasons are the sole foundation of your idea then you may find that you are setting yourself up for failure. Starting a business will require money and it will also take a lot of time and energy. If you push yourself and have the right attitude then there is no reason why you can’t be successful, but if your heart just isn’t in it then you should really rethink your ideas.

Poor Management

Another reason why a lot of start-ups fail is because of poor management. New business owners often lack the right expertise, such as finance, sales, production or even purchasing. If you don’t recognize what you need help with then you may end up putting your company out of business. If you want to help yourself here, then you need to understand your own ideas and you also need to educate yourself on the skills you need. When you have done this, you can then outsource whatever you need.

Not Enough Capital

Businesses also fail because they don’t have enough funding. It’s understandable that as a new business owner, you might not understand cash flow, and you may also have no idea how much money your company needs to take off and get the right reporting tools. One way for you to get around this would be for you to create a solid business plan. Work out all of the expenses you need to pay, and then calculate how much profit you need to make. This will help you to fill in the blanks while also creating sensible goals. If you do require funding then you can go to an investor or in some instances, you can even go through a crowd-funding campaign.

Your Brand Doesn’t Align with your Values

If your brand doesn’t reflect your company values, then your customers may have a hard time trusting you. Rebranding a company isn’t an easy process but sometimes it’s required if you want to grow. When rebranding your company, make sure that you base everything around the core foundation of your company. This includes taking into account your target market, your existing customer base and what you envision your company to look like through expansion in the future.


If you have a poor business location, then this will seriously impede your success. If you know that your business is entirely reliant on walk-in traffic or if you need a professional office in order to meet with clients, then you have to make sure that your location reflects this.

By following the above tips, you can be sure to make the most out of your business while also shielding it from failure.


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Filed under: Travel Guide

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has written 1087 posts on Vagabond Journey. Contact the author.

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