Why New Businesses & Startup Fails

Learn Common Reasons of Failure & Avoid Mistakes To Run a Successful Sustainable Business

Establishing a business is always a big decision for anyone. With technological advancement and boom of ecommerce sector, things are getting easier and easier now. Whether it is about entrance in business, acquittance of new customers, lower supply chain costs or fetching contemporaries stats. All is easy to available and one click away now. Literally you can now start business with zero investment, in some particular situations and with certain conditions. Now benefits of doing business seems to be more than threads & risks of doing business.

These seamless benefits and ease of doing business now a days is just a one side of picture. On the other side, now everyone with business idea and small investment today, starts his or her own startup, without much consideration and planning. Due to which many startups and businesses fails. The speed of going down now is more than speed of going up. Some startups sprang up in lockdown and they cash the wave, but now they are stuck. Some are live but not upto their market potentials due to lack of deliberate planning and consideration to business.

Along with proper operations management, finance management, HR management and business management overall; give your deliberate thoughts to these given ten reasons of failures and includes this into your business continuity management plans:

Expecting Instant Profits

The right expectations and patience is key for entrepreneurs. Build a loyal and sustainable customer base over time and void investing in new ventures yet. Don’t go for horizontal expansion, rather first build your reputation in your niche. When you get to that stable level of trust and certain inflows, now make experiments in other niches.

Unnecessarily Complicating Things

You need to be as simple and straightforward as possible. This is not the time to be creative or you’ll just be confusing small matters and turning them into bigger issues. Those extra thoughts are like distractions. Keep your mind focused and uni-directional, if possible.

Don’t Try To Do Everything

There has to be a clear boundary line between your sublime talents and things to outsource. It is okay to share work or ask for help. If you try to do everything by yourself; you’ll be turned out, burnt and stressed by everything. So, delegate and keep things under control. Rule is simple, delegate all work not falling out of your domain or taking too much of your time. Reserve your energies for more bigger and better causes. Not only this will relax you but it will also improve your work efficiencies.

Want to be more productive at efficient in your business, follow these Super Simple 5 Tips To Be Highly Productive & Efficient At Work.

No Marketing Plans & Strategies

Capitalize on every resource available to you. If you rely on one channel of promotion, your brand will not be able to grow in a wholesome manner. A marketing plan is an extremely important step. With the right mix of publishing tools and strategies you can engage more traffic to your store fronts, hence, can increase chance of more sale. Every social media handle is your brands interaction point with users. Give better, pleasant and engaging experience. Engaging doesn’t mean false, misleading, inappropriate, trapping and unethical advertisement.

Digital marketing strategies must includes following considerations; define your business objective & goals, define your budget, define your target audience and make analysis of your competitive presence analysis. Mind it, buyers now looking for more than just products. Interact frequently with live sessions or product review sessions. This will build trust, more engagements, hence chances of more orders with less uncertainties and lesser returns.

Learn To Accept Mistakes

You are bound to make mistakes, but you need to be confident in yourself and your plan. If you don’t believe in what you are doing, no one else will. Accept the mistakes and move past them. Don’t resist and oppose; try to learn pass those mistakes. Don’t let your mistakes to be your failure.

Not Using Right Digital Tools

Not knowing the need of your customer or potential customer is one of the biggest shortcoming of any business. Not accessing the need and not offering the right tool at the right time is the main lagging factor for all customer driven online retails. Normally, social media consumer is not there for immediate shopping, rather they are there for entertainment and gossiping. But connecting your product at the right time with right information and right call to action option, can convert their passive need into active demand and then can lead to order.

Say you want to build a cosmetic store. You must have to run engagement and messaging campaign continuously to get interaction with your potential customers by discussing their problems and offering them right tools. It may be hard for a new cosmetic brand to sell directly; as people tends to be more protective about selection of sensitive cosmetic product. Therefore, your call of action is must have to active customer chat support at website and message now campaign on social media handles.

Another lacking in small e-commerce brands is non availability of mobile friendly interface or ideally no mobile app. 60-70% traffic now is coming from mobiles. Also google ranking factor consider mobile friendly website as SEO score point for any e-commerce brand or blog. Therefore, right & user friendly mobile interface with good speed and navigations is the must have for any new ecommerce brand to survive.

Over Obsession With SEO & Digital Marketing

Most brands we can see in Pakistan, now only putting their efforts in one medium only. They seems to be the non believer of full stake content & digital marketing. Full stack content strategy is a full time job with long term objectives and goals. Some brands overly focus on digital marketing; yes it brings quick traffic, yes it will give your orders. But cost of this marketing is getting high day by day due to auction bid method and heavy investment by giants. On the other side, some non-branded not so quality vendors are just focusing on black head SEO strategy to cash the void left by big quality brands.

The recommendatory point here is that; all e-commerce brands should focus on both short term and long term goals simultaneously. Digital marketing is inevitable, yes we are to invest in it. But do focus side by side on organic quality content building. This timeless approach will give you more organic traffic and more orders without any expense. But you have to invest your efforts into it.

Recommendation is to run your online business marketing with the right mix of social media paid campaigns and search engine optimization by building quality, relevant content for 6 months to 2 years. This will build authority of your brand and will offer you quality, high conversion offering traffic.

Lack of Proper Customer Care & Support

Most e-commerce stores even including big brands doing a terrible job in this regard. Inspite of relatively early boom in Pakistan’s e-commerce market, due to Covid pandemic and lockdowns; consumer is still facing issues of not responding to customer query, late or vague response, late order delivery and insensitive behavior of not addressing the concerns of the customers. Most brands still not offering full RRE policy with every order. RRE mean return, refund and exchange. Other some only offers exchange or some offers return with voucher; but not conclusively offering full money back guarantee.

Over Rely On Seasonal Campaigns

Participation in promotional, festive and seasonal sale campaign now seems to be inevitable part of a retail business. But this is not just about giving huge flat discounts on graded, b pair or leftover products. Rather, it is about giving competitive prices with maintaining same standard and same shipping cost.

Due to large economies of scale; big businesses have the luxury to play all around with pricing and related customer services. Hence making things complicated and not so sustainable for small size business or new startups. No small or medium size business can stand such price sensitive competition by lowering profits continuously. Therefore, the point is to get out of this low price trap by providing specialized, unique and relevant products backed with great customer care services. This will not only retain your customers, but also will make sure continuous stable and certain inflows regardless of the heavy sale promotions by giants in business. Mind it customer retention is more important than customer acquisition, if you want to sustain your business in a competitive market.

Focus just on your customer retention by providing unique, relevant and not so price sensitive products covered with good customer service.

Bilal Ashraf-Founder House of Calibre, Zamani.PK, Towel Showel and Infinity Studios

Not The Right Mix Of Things

This is not a single or alone mistake, rather it may or may not be set of collective mistakes. First mistake is their lack of assessment of right & relevant market. Most startups inspired their ideas from developed economies. When they put their ideas into operation in emerging or under developed economies, most of the time they stuck themselves with no response from given market; mainly due to non-relevancy with culture, time & tradition, and often non-availability of proper logistical support. Second mistake, is lack of offering of right product for right market at the right time.

The key success factor here is the use of right marketing and right supply chain strategy. Identify the relevance of your product or service to

If you want to learn How to Start & Run Your Business; make right, correct & timely decisions for your business, based on solid SWOT analysis for your startup.

6 thoughts on “Why New Businesses & Startup Fails

  • February 3, 2021 at 7:48 pm

    Arrogane is another cause of failure

  • February 4, 2021 at 9:17 pm

    Your articles on self help, decision making, personal development are great. But this one is at pin point accuracy for emerging economies

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  • June 12, 2021 at 8:20 pm

    I started my business during lockdown early 2020. I got organic sale of my herbal home made products. Now I’m feeling myself stuck, as inspite of campaigns and followers, don’t find any lead and any conversion or engagement. I want take things to next and stable phase. Please guide?

    • June 12, 2021 at 8:24 pm

      Danish you certainly can uplift your startup, you just need right kind of people or right kind of guidance. As I personally knows many people who are facing same situation after lockdown. As things are more competitive now. I recommend you to contact infinitystudios.pk as these guys have tons of experience as far as Pakistani e-commerce landscape is concerned; they are kind of specialist in it. They will also train you along the way.

  • June 18, 2021 at 3:21 am

    Bilal, I must say your articles on self-help, decision making, personal development and leadership are greater most common reasons small businesses fail include a lack of capital or funding, retaining an inadequate management team, lack of planning, lack of timely decision making and a faulty infrastructure or business model, and unsuccessful marketing initiatives.


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