why entrepreneurs fail?

It is a known fact that most companies fail within a year and relatively few make it to the 5th year. Despite being aware of this harsh reality, entrepreneurs are keen on starting their own ventures.

Obviously, holding an optimistic spirit is the key to survive in hardships. However, the visionary yet unrealistic perspective of entrepreneurs is often the one pulling them down.

This large rate of failure has much to do with the entrepreneurs and how they bag success for their company. The article below mentions the reasons why most entrepreneurs fail.

Inappropriate planning

Without prior planning, an idea is just an idea and no matter how innovative and fruitful it may sound, the results will not be satisfactory.

Planning is just not limited to financial budget and investment, it also relates to finding the target population, marketing the product and services, and keeping in mind the risks that come associated with it.

Without a plan, every business venture is just like a ship wandering in the ocean, not knowing where to go. And more often than not, business ventures which are too idealistic thinking that once they land into the markets, they will automatically be crowded with customers are more likely to fail.

Keeping the focus on just the product and not evaluating how the following process will come, is one big shortcoming of inefficient entrepreneurs.

Lack of skills

The fascinating stories of the business world inspire thousands of individuals who dream of becoming successful like Steve Jobs. However, there are numerous differences between the successful entrepreneurs and the ones who fail.

One big difference lies in their business calibre. The kind of practical intelligence or street smartness required in the field of business is certainly missing in such entrepreneurs.

And while some might think that a higher Intelligence Quotient (IQ) is enough for anyone to enter any profession, this is one of the biggest lies ever told.

Every field requires a different set of abilities to be possessed by the individuals. And the field of business requires greater entrepreneurial IQ.

Whether or not they know their own idea, in most of the cases, such entrepreneurs have no understanding of the workings of the market and whether their idea would be accepted or rejected.

While for some of their faulty perception leads them to the idea that they are proficient enough to start a business venture.

Inadequate funding and poor sales

Most entrepreneurs find it difficult to raise funds at the right time, and as a startup, they need a financial backup at every stage. Most of them fail at anticipating the financial assistance that would be required, while others start swindling the financial institutions, which leads to the big institutions backing off.

The poor sale is one repercussion of this situation, as with constrained financial resources entrepreneur avoid implementation of marketing programs and thus end up having limited or no sales, thereby leading them into debt.

Hence, inadequate funding and poor sales together form a vicious cycle, making it difficult for the entrepreneur to come out.


The entrepreneur heading a new venture or rather the inefficient one is somewhat oblivious of what is happening at the lower levels of the organization.

While it may not be a great idea to micro-manage at every single point, but keeping eyes open to the ground realities is one of the least steps an entrepreneur can take.

In many cases, such entrepreneurs are seen to leave this on the subordinates while paying attention to the big picture.

The mismanagement combined with a structural impairment with most of the burdens on the subordinate eventually leads to breakdown and therefore entrepreneur failing to even manage their own team.

Unawareness and alternate planning

When faced with adverse and unpredictable conditions, entrepreneurs often find it difficult to stay in the game and persist with alternate game-changing ideas.

These ideas converted into products and can get an online trademark registration to secure the brand’s unique identity.

Unsuccessful entrepreneurs continue their course of action without adapting it to the changing demands of the situation and hence, fail.

Their awareness, on the part of, assessing the changes and making sense of the signs signalling their failure, is also one major factor why they do not carry out or even think about an alternate course of action.


While a lot more goes into the making of an unsuccessful entrepreneur and even more facets contribute to the success of an entrepreneur.

Use of social media to promote one’s products and services, website, training and various others can be employed to avoid this kind of a brutal situation.

And being optimistic is what keeps one going, however, perceiving, interpreting and acting all need to be done at the correct time, so that everything happens at the right pace and within a person’s consideration.

Hence, appropriate planning, time management, and the use of effective marketing strategies all can work together build a successful business venture.