• Ellard Thomas, MBA

Preventing Operational Demise: 8 Overlooked Reasons Why Small Businesses Fail to Achieve Success


The life of a small business owner is one of many joys and challenges. There’s no feeling like turning a vision or thought into its tangible form.


Unfortunately, while ensuring operational success, some small businesses fail before ever reaching the achievements they deserve.


In today’s article, my goal is to help you identify the eight reasons why small businesses fail, so you can avoid the pitfalls that others have fallen into.


Why do most small businesses fail?


While you’re an entrepreneur who’s knee-deep in the trenches of growing your company, the looming prospect of failure is ever-present and always there hoping to catch you at your weakest moment.


With so much demanding your time, it’s easy to get caught off guard. If you’re not prepared to deal with those often-occurring trials and tribulations, you could easily find yourself laying on the pavement of failure.


Now, if you’re seeking to avoid business failure, there are some things you should be doing, and other activities that you should no longer do. Take heed of these eight recurring reasons why small businesses fail, and do your best to address them before they rob you and your company of a profitable future.


Some might be easy to overlook. Others are pretty obvious. Regardless of your situation, I strongly suggest you find a good mentor (or consultant) who can help you overcome the obstacles that come with running a successful business.


8 Reasons Why Small Businesses Fail to Achieve Success


It’s not easy by any measure to build a successful business. If it were simple, everyone would be an entrepreneur. But to ensure your company’s success, take heed to these failures, and do whatever you can to avoid them.


1.) Failure to deliver true value.


At the core of any business is value. The world’s most successful small businesses always deliver the most value. It’s in both their products and services.


To achieve massive success as an entrepreneur, you must find a way to, not only fulfill your promise, but also deliver high value. Your prospects want value, and you should want to give it to them. If you’re looking for a way to profit quickly, rather than focusing on delivering value, you’ll find yourself going out of business.


No one wants to spend money on services or products that have no perceived value. To help you with understanding this, think about what your value proposition is. How do you perform better or faster than competitors? Why makes your products or services superior to others in the market place? Think of value as your potential customers do, and you’ll see a big change in your business.


2.) Failure to connect with intended or target audience.


If you cannot identify and then connect with your target audience, your business will fail. Many small business owners lose their position in the marketplace because they do not connect with their intended prospects.


As mentioned in step one, when discussing value, you must think like your future customers. Who are they? What do they want? How will your services or products help them?


If you’re not addressing your prospects pain points, you’ve failed to understand who your target audience is. The ‘shotgun’ approach to a broad demographic will only result in more marketing costs; not revenue.


Many successful business owners use focus groups, market surveys, marketing firms, or make phone calls to understand their ideal clients’ needs better. This is a great way to avoid business failure.


3.) Failure to optimize conversions.


As an entrepreneur, you have so much on your plate. Yet, equally important as other business obligations is your ability to convert leads (or prospective clients) into clients and customers. You must get really good at this particular marketing skill.


Optimizing conversions is critical to the success of your business. By mastering this skill, you’ll increase your ROI, and not lose money due to costly ads.


Many budding small business owners make the mistake of relying solely on organic traffic methods, such as search engine optimization. Although this is a great long-term strategy, you must get business in the door, both today and in the future.


Many successful business owners partner with marketing strategists to help achieve this particular business initiative. They understand that, without optimizing conversions, it’s merely a matter of time until marketing capital runs out and the scramble to find new business ensue.


4.) Failure to devise an effective sales funnel.


As a thriving small business owner, one of your primary business goals should be building an effective sales funnel. These powerful and automated “selling machines” help minimize friction in making sales and allows you to focus on other areas of your business.


By putting your business development tasks on autopilot, you become freer to host webinars, tune-up your current service offerings or attend other pertinent meetings.


One of the goals of a sales funnel is to help build and sustain the relationship with both buyers and prospects without your physical presence. Even better, you can write your emails ahead of time to welcome, presell and inform your customer base of your best recommendations, etc. This adds to the perceived value your company already offers.


5.) Failure to have authenticity and transparency.


Today’s consumers are savvier more than ever. They often perform research about you before making you a consideration.


Businesses that lack authenticity and transparency are heading towards operational demise. Their end may not be today, but I assure you it’s imminent.


Without focusing on your customer’s need, or focusing on the wrong things, you can easily lose your future customers’ trust. To help avert this risk, focus on being your authentic and transparent self.


For example, if you had a complaint about your service or product, be honest and advise how you rectified the problem. Don’t run away from responsibility. Or, even better, talk about how you’ve improved your clients’ situation by stating their problem and what actions you took.


6.) Failure to compete against market leaders.


Hmmm. As a small business owner, who’s looking to achieve high levels of success, I don’t think you should ever ‘compete’ against anyone. Instead, I believe your time is best spent on dominating your market!


A grave mistake that many entrepreneurs make is attempting to compete with bigger companies or basing their margins on what other small business competitors are doing. Stop that, right now!


The only way you’re going to thrive in today’s business world is to dominate. Get really good at attracting your ideal customers and do what you need to do to make your presence felt everywhere you do business.


Contact us if you’d like to learn how we help small business owners dominate their market!


7.) Lack of cost-control measures.


Having an acute sense of control over your company’s expenses is imperative to your success. Surely, it’s tempting to spend when business seems to be booming. However, you must remember to have reserves for adverse economic changes.


Unfortunately, many small business owners have lost their businesses because of uncontrollable spending. Had they been smarter about their financial practices, they could’ve been among the other successful small business owners who continue to thrive.


8.) No effective strategy and effective leadership.


You are in a fortunate position. You’re a small business owner! You have taken the bull by the horns and made the decision to forge your own way in life. However….


As a small business owner, you’re responsible for creating strategies that will ensure your company’s success. Beside an operational and business plan, you need to make sure you have a strong marketing plan. Additionally, you must know how much business you can truly take on before over-stressing your company and resources.


Successful small business owners are strategic. They lead with the end in mind. They don’t mind investing in their companies and are fearless when addressing problems. Some have even partnered with marketing firms for assistance.


Ready For Your Own Success Story?


There’s no small business owner on earth who wants to fail. It’s never the intention when you go into business. Sadly, for thousands of entrepreneurs, this has become their fate.


This doesn’t have to be you. If you’re ready to drive more business into your company, then there’s a cost-effective way to do this. Also, if you’re in need of a hand, contact us.


The K|E Marketing Company was built with the small business owner’s success in mind. Let us know where you need help and we’ll ensure you have a fail-safe plan for success.



© 2023 by K|E Markting Group, LLC.