{"appState":{"pageLoadApiCallsStatus":true},"articleState":{"article":{"headers":{"creationTime":"2016-03-26T20:50:13+00:00","modifiedTime":"2019-05-29T17:46:25+00:00","timestamp":"2022-09-14T18:17:09+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Small Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34251"},"slug":"small-business","categoryId":34251},{"name":"General Small Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34253"},"slug":"general-small-business","categoryId":34253}],"title":"5 Reasons Why Small Businesses Fail","strippedTitle":"5 reasons why small businesses fail","slug":"five-reasons-why-small-businesses-fail","canonicalUrl":"","seo":{"metaDescription":"Every year, lots of Canadians get the entrepreneurial urge and start businesses. Some of those small businesses become very successful and profitable. But every","noIndex":0,"noFollow":0},"content":"Every year, lots of Canadians get the entrepreneurial urge and start businesses. Some of those small businesses become very successful and profitable. But every year lots of start-ups in Canada fail. Here are some of the key reasons that small businesses fail:\r\n<ul>\r\n \t<li><strong>The business is based on an idea that only a mother could love.</strong> A business idea may seem wonderful to the business owner, but a business needs a slightly larger market than the owner if it’s going to prosper. A business won’t last long if it offers a product or service that nobody wants or can afford.</li>\r\n \t<li><strong>The business is undercapitalized.</strong> A business with too much debt will fail, even if it’s based on a great idea and is otherwise well run. The business has to make enough money to cover its loan payments as well as pay the owner. If a business doesn’t repay its loans, its creditors will pull the plug. Cash is king.</li>\r\n \t<li><strong>The business doesn’t keep the customers happy.</strong> A fantastic business concept and good advertising may get the customers in the door — once — but it takes excellent customer service to keep customers coming back. Dissatisfied customers don’t pay their bills, won’t return, and won’t refer other customers. Without customers (who pay) the business will fail.</li>\r\n \t<li><strong>The business doesn’t change with the times. </strong>A business must be able to adapt — what worked in the past may not work in the future. A business that doesn’t respond to the changing marketplace may find that there is no longer a market for its product or services, or that its customers have gone over to the competition.</li>\r\n \t<li><strong>The business expands unwisely.</strong> Some unprofitable businesses expand in the hope that doing more business will increase profits — but expanding an unprofitable business just creates a bigger unprofitable business. And even a successful business that expands without proper planning may lose its core customers because it can no longer serve them properly, or may not generate enough new customers to cover the cost of financing the expansion.</li>\r\n</ul>","description":"Every year, lots of Canadians get the entrepreneurial urge and start businesses. Some of those small businesses become very successful and profitable. But every year lots of start-ups in Canada fail. Here are some of the key reasons that small businesses fail:\r\n<ul>\r\n \t<li><strong>The business is based on an idea that only a mother could love.</strong> A business idea may seem wonderful to the business owner, but a business needs a slightly larger market than the owner if it’s going to prosper. A business won’t last long if it offers a product or service that nobody wants or can afford.</li>\r\n \t<li><strong>The business is undercapitalized.</strong> A business with too much debt will fail, even if it’s based on a great idea and is otherwise well run. The business has to make enough money to cover its loan payments as well as pay the owner. If a business doesn’t repay its loans, its creditors will pull the plug. Cash is king.</li>\r\n \t<li><strong>The business doesn’t keep the customers happy.</strong> A fantastic business concept and good advertising may get the customers in the door — once — but it takes excellent customer service to keep customers coming back. Dissatisfied customers don’t pay their bills, won’t return, and won’t refer other customers. Without customers (who pay) the business will fail.</li>\r\n \t<li><strong>The business doesn’t change with the times. </strong>A business must be able to adapt — what worked in the past may not work in the future. A business that doesn’t respond to the changing marketplace may find that there is no longer a market for its product or services, or that its customers have gone over to the competition.</li>\r\n \t<li><strong>The business expands unwisely.</strong> Some unprofitable businesses expand in the hope that doing more business will increase profits — but expanding an unprofitable business just creates a bigger unprofitable business. And even a successful business that expands without proper planning may lose its core customers because it can no longer serve them properly, or may not generate enough new customers to cover the cost of financing the expansion.</li>\r\n</ul>","blurb":"","authors":[],"primaryCategoryTaxonomy":{"categoryId":34253,"title":"General Small Business","slug":"general-small-business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34253"}},"secondaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"tertiaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"trendingArticles":null,"inThisArticle":[],"relatedArticles":{"fromBook":[],"fromCategory":[{"articleId":226108,"title":"Packing Power into Advertising Headlines","slug":"packing-power-advertising-headlines","categoryList":["business-careers-money","business","small-business","general-small-business"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/226108"}},{"articleId":226105,"title":"How Small Business Marketing Is Different","slug":"small-business-marketing-different","categoryList":["business-careers-money","business","small-business","general-small-business"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/226105"}},{"articleId":226102,"title":"Marketing a Start-Up Business","slug":"marketing-start-business","categoryList":["business-careers-money","business","small-business","general-small-business"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/226102"}},{"articleId":226099,"title":"The Relationship between Marketing and Sales","slug":"relationship-marketing-sales","categoryList":["business-careers-money","business","small-business","general-small-business"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/226099"}},{"articleId":226096,"title":"Marketing: The Whole is Greater Than the Parts","slug":"marketing-whole-greater-parts","categoryList":["business-careers-money","business","small-business","general-small-business"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/226096"}}]},"hasRelatedBookFromSearch":true,"relatedBook":{"bookId":282598,"slug":"starting-and-running-a-small-business-for-canadians-for-dummies-all-in-one-2nd-edition","isbn":"9781119648390","categoryList":["business-careers-money","business","small-business","general-small-business"],"amazon":{"default":"https://www.amazon.com/gp/product/1119648394/ref=as_li_tl?ie=UTF8&tag=wiley01-20","ca":"https://www.amazon.ca/gp/product/1119648394/ref=as_li_tl?ie=UTF8&tag=wiley01-20","indigo_ca":"http://www.tkqlhce.com/click-9208661-13710633?url=https://www.chapters.indigo.ca/en-ca/books/product/1119648394-item.html&cjsku=978111945484","gb":"https://www.amazon.co.uk/gp/product/1119648394/ref=as_li_tl?ie=UTF8&tag=wiley01-20","de":"https://www.amazon.de/gp/product/1119648394/ref=as_li_tl?ie=UTF8&tag=wiley01-20"},"image":{"src":"https://catalogimages.wiley.com/images/db/jimages/9781119648390.jpg","width":250,"height":350},"title":"Starting & Running a Small Business For Canadians All-in-One For Dummies","testBankPinActivationLink":"","bookOutOfPrint":true,"authorsInfo":"\n <p><p><b>Bryan Borzykowski</b> is an award-winning financial journalist, who writes mostly about investing, personal finance and small business. He’s the co-author of <i>Day Trading For Canadians For Dummies</i> and contributes to the <i>Globe and Mail</i>, <i>Business</i> magazine, the <i>Toronto Star</i>, MoneySense and other leading Canadian publications. You can find Bryan at www. bryanborzykowski.com or on Twitter @bborzyko.</p> <p><b>Andrew Bell</b> was an investment reporter and editor with The Globe and Mail for 12 years. He joined Business News Network as a reporter in 2001. Bell, an import from Dublin, Ireland, was for 10 years the main compiler of Stars & Dogs in Saturday’s Globe. The roundup of hot and damp stocks and mutual funds was an invaluable therapeutic aid in relieving his own myriad jealousies, regrets, and resentments. He has also taken to the stage, where he practises a demanding \"method\" that involves getting the audience and other performers as off-balance and upset as possible. He lives in Cabbagetown, Toronto, with his wife and daughter.</p> <p><b>Christopher Cottier</b>, BSc, MBA, is a senior investment advisor based in British Columbia. In 1982, he left the world of banking to join the investment industry in Vancouver so he could continue to pursue his love of rugby. More than twenty five years later, he’s still managing money and playing rugby. With Betty Jane Wylie, Christopher is the co-author of <i>The Best Is Yet to Come: Enjoying a Financially Secure Retirement</i> (Key Porter). Christopher was ably assisted by Daniel Quon, BA, who has been awarded the Queen Elizabeth 11 Golden Jubilee Medal.</p> <p><b><b data-author-id=\"34409\">Andrew Dagys</b></b>, CMA, is a best-selling author who has written and coauthored several books, including <i>Stocking Investing For Canadians For Dummies</i> and <i>Investing Online For Canadians For Dummies</i>. He has appeared on Canada AM and several popular CBC broadcasts to offer his insights on the Canadian and world investment landscapes. Andrew has contributed columns to <i>CanadianLiving</i>, <i>Forever Young</i>, and other publications. He has appeared on Canada AM and several popular CBC broadcasts to offer his insights on the Canadian and world investment landscapes.</p> <p><b>Matthew Elder</b> is a writer and communications consultant based in Toronto. Previously he was vice-president, content and editorial, of Morningstar Canada. A Montreal native, he was a columnist and editor specializing in personal finance with <i>The Gazette</i> for 10 years before moving to the Financial Post in 1995, where he was mutual funds editor and columnist until joining Morningstar in 2000.</p> <p><b>Lita Epstein</b>, who earned her MBA from Emory University's Goizueta Business School, enjoys helping people develop good financial, investing, and tax planning skills. She designs and teaches online courses and has written more than 20 books, including <i>Bookkeeping For Dummies</i> and <i>Reading Financial Reports For Dummies</i>, both published by Wiley.</p> <p><b>Douglas Gray</b>, B.A., LL.B., formerly a practicing lawyer, has extensive experience in all aspects of real estate and mortgage financing. He has acted on behalf of buyers, sellers, developers, investors, lenders and borrowers. In addition, he has over 35 years of personal experience investing in real estate. He is the author of 26 best-selling real estate, business and personal finance books, as well as a consultant and columnist.<br />Mr. Gray gives seminars on real estate throughout Canada to the public, as well as for professional-development programs for the real estate industry. He has presented to more than 250,000 people and is frequently interviewed by the media as an authority on real estate and small business entrepreneurship. Mr. Gray is president of the Canadian Enterprise Development Group Inc. and lives in Vancouver, BC. His website is www.homebuyer.ca.</p> <p><b>Michael Griffis</b> became an active trader in the mid 1980s. He first traded commodities and precious metals after taking a commodities trading class as part of his MBA program at Rollins College. He became a stockbroker in 1992, where he helped businesses and individuals manage investments in stocks, bonds, mutual funds, retirement plans, 401(k) employee-savings plans, and asset management programs. Michael is an author and business owner and has written about stock trading for online audiences.</p> <p><b>Ann C. Logue</b>, MBA, is the author of <i>Day Trading For Dummies</i> and <i>Emerging Markets For Dummies</i>. She has written for <i>Barron's</i>, <i>The New York Times</i>, <i>Newsweek Japan</i>, <i>Wealth Manager</i>, and the <i>International Monetary Fund</i>. She is a lecturer at the Liautaud Graduate School of Business at the University of Illinois at Chicago. Her current career follows 12 years of experience as an investment analyst. She has a B.A. from Northwestern University and an M.B.A. from the University of Chicago, and she holds the Chartered Financial Analyst (CFA) designation.</p> <p><b>Peter Mitham</b> has written on Canadian real estate for publications in Canada and abroad. He contributes a weekly column of real estate news for Business in Vancouver and writes regularly for <i>Western Investor</i>, a sister publication focused on real estate investment opportunities in Western Canada, as well as Canadian Real Estate Magazine. He has also collaborated with Douglas Gray on <i>The Canadian Landlord's Guide: Expert Advice for the Profitable Real Estate Investor</i> (Wiley).</p> <p><b>Paul Mladjenovic</b>, CFP is a certified financial planner practitioner, writer, and public speaker. His business, PM Financial Services, has helped people with financial and business concerns since 1981. He is the author of <i>Stock Investing For Dummies</i> (Wiley) and has accurately forecast many economic events, such as the rise of gold, the decline of the U.S. dollar, and the housing crisis. Paul’s personal website can be found at www.mladjenovic.com.</p> <p><b>Andrew Dagys</b> is a professional accountant and the bestselling author of over a dozen books on investing, financial planning, and technology.</p> <p><b>Paul Mladjenovic</b> is a well-known certified financial planner and investing consultant with over 20 years of experience.</p> <p><b>Andrew Dagys</b> is a professional accountant and the bestselling author of over a dozen books on investing, financial planning, and technology.</p> <p><b>Paul Mladjenovic</b> is a well-known certified financial planner and investing consultant with over 20 years of experience.</p></p>","authors":[{"authorId":34409,"name":"Andrew Dagys","slug":"andrew-dagys","description":" <p><b>Bryan Borzykowski</b> is an award-winning financial journalist, who writes mostly about investing, personal finance and small business. He’s the co-author of <i>Day Trading For Canadians For Dummies</i> and contributes to the <i>Globe and Mail</i>, <i>Business</i> magazine, the <i>Toronto Star</i>, MoneySense and other leading Canadian publications. You can find Bryan at www. bryanborzykowski.com or on Twitter @bborzyko.</p> <p><b>Andrew Bell</b> was an investment reporter and editor with The Globe and Mail for 12 years. He joined Business News Network as a reporter in 2001. Bell, an import from Dublin, Ireland, was for 10 years the main compiler of Stars & Dogs in Saturday’s Globe. The roundup of hot and damp stocks and mutual funds was an invaluable therapeutic aid in relieving his own myriad jealousies, regrets, and resentments. He has also taken to the stage, where he practises a demanding \"method\" that involves getting the audience and other performers as off-balance and upset as possible. He lives in Cabbagetown, Toronto, with his wife and daughter.</p> <p><b>Christopher Cottier</b>, BSc, MBA, is a senior investment advisor based in British Columbia. In 1982, he left the world of banking to join the investment industry in Vancouver so he could continue to pursue his love of rugby. More than twenty five years later, he’s still managing money and playing rugby. With Betty Jane Wylie, Christopher is the co-author of <i>The Best Is Yet to Come: Enjoying a Financially Secure Retirement</i> (Key Porter). Christopher was ably assisted by Daniel Quon, BA, who has been awarded the Queen Elizabeth 11 Golden Jubilee Medal.</p> <p><b>Andrew Dagys</b>, CMA, is a best-selling author who has written and coauthored several books, including <i>Stocking Investing For Canadians For Dummies</i> and <i>Investing Online For Canadians For Dummies</i>. He has appeared on Canada AM and several popular CBC broadcasts to offer his insights on the Canadian and world investment landscapes. Andrew has contributed columns to <i>CanadianLiving</i>, <i>Forever Young</i>, and other publications. He has appeared on Canada AM and several popular CBC broadcasts to offer his insights on the Canadian and world investment landscapes.</p> <p><b>Matthew Elder</b> is a writer and communications consultant based in Toronto. Previously he was vice-president, content and editorial, of Morningstar Canada. A Montreal native, he was a columnist and editor specializing in personal finance with <i>The Gazette</i> for 10 years before moving to the Financial Post in 1995, where he was mutual funds editor and columnist until joining Morningstar in 2000.</p> <p><b>Lita Epstein</b>, who earned her MBA from Emory University's Goizueta Business School, enjoys helping people develop good financial, investing, and tax planning skills. She designs and teaches online courses and has written more than 20 books, including <i>Bookkeeping For Dummies</i> and <i>Reading Financial Reports For Dummies</i>, both published by Wiley.</p> <p><b>Douglas Gray</b>, B.A., LL.B., formerly a practicing lawyer, has extensive experience in all aspects of real estate and mortgage financing. He has acted on behalf of buyers, sellers, developers, investors, lenders and borrowers. In addition, he has over 35 years of personal experience investing in real estate. He is the author of 26 best-selling real estate, business and personal finance books, as well as a consultant and columnist.<br />Mr. Gray gives seminars on real estate throughout Canada to the public, as well as for professional-development programs for the real estate industry. He has presented to more than 250,000 people and is frequently interviewed by the media as an authority on real estate and small business entrepreneurship. Mr. Gray is president of the Canadian Enterprise Development Group Inc. and lives in Vancouver, BC. His website is www.homebuyer.ca.</p> <p><b>Michael Griffis</b> became an active trader in the mid 1980s. He first traded commodities and precious metals after taking a commodities trading class as part of his MBA program at Rollins College. He became a stockbroker in 1992, where he helped businesses and individuals manage investments in stocks, bonds, mutual funds, retirement plans, 401(k) employee-savings plans, and asset management programs. Michael is an author and business owner and has written about stock trading for online audiences.</p> <p><b>Ann C. Logue</b>, MBA, is the author of <i>Day Trading For Dummies</i> and <i>Emerging Markets For Dummies</i>. She has written for <i>Barron's</i>, <i>The New York Times</i>, <i>Newsweek Japan</i>, <i>Wealth Manager</i>, and the <i>International Monetary Fund</i>. She is a lecturer at the Liautaud Graduate School of Business at the University of Illinois at Chicago. Her current career follows 12 years of experience as an investment analyst. She has a B.A. from Northwestern University and an M.B.A. from the University of Chicago, and she holds the Chartered Financial Analyst (CFA) designation.</p> <p><b>Peter Mitham</b> has written on Canadian real estate for publications in Canada and abroad. He contributes a weekly column of real estate news for Business in Vancouver and writes regularly for <i>Western Investor</i>, a sister publication focused on real estate investment opportunities in Western Canada, as well as Canadian Real Estate Magazine. He has also collaborated with Douglas Gray on <i>The Canadian Landlord's Guide: Expert Advice for the Profitable Real Estate Investor</i> (Wiley).</p> <p><b>Paul Mladjenovic</b>, CFP is a certified financial planner practitioner, writer, and public speaker. His business, PM Financial Services, has helped people with financial and business concerns since 1981. He is the author of <i>Stock Investing For Dummies</i> (Wiley) and has accurately forecast many economic events, such as the rise of gold, the decline of the U.S. dollar, and the housing crisis. Paul’s personal website can be found at www.mladjenovic.com.</p>","hasArticle":false,"_links":{"self":"https://dummies-api.dummies.com/v2/authors/34409"}},{"authorId":10471,"name":"Margaret Kerr","slug":"margaret-kerr","description":" <p><b>Andrew Dagys</b> is a professional accountant and the bestselling author of over a dozen books on investing, financial planning, and technology.</p> <p><b>Paul Mladjenovic</b> is a well-known certified financial planner and investing consultant with over 20 years of experience.</p>","hasArticle":false,"_links":{"self":"https://dummies-api.dummies.com/v2/authors/10471"}},{"authorId":10472,"name":"JoAnn Kurtz","slug":"joann-kurtz","description":" <p><b>Andrew Dagys</b> is a professional accountant and the bestselling author of over a dozen books on investing, financial planning, and technology.</p> <p><b>Paul Mladjenovic</b> is a well-known certified financial planner and investing consultant with over 20 years of experience.</p>","hasArticle":false,"_links":{"self":"https://dummies-api.dummies.com/v2/authors/10472"}}],"_links":{"self":"https://dummies-api.dummies.com/v2/books/282598"}},"collections":[],"articleAds":{"footerAd":"<div class=\"du-ad-region row\" id=\"article_page_adhesion_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_adhesion_ad\" data-refreshed=\"false\" \r\n data-target = \"[{"key":"cat","values":["business-careers-money","business","small-business","general-small-business"]},{"key":"isbn","values":[null]}]\" id=\"du-slot-63221aa5be094\"></div></div>","rightAd":"<div class=\"du-ad-region row\" id=\"article_page_right_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_right_ad\" data-refreshed=\"false\" \r\n data-target = \"[{"key":"cat","values":["business-careers-money","business","small-business","general-small-business"]},{"key":"isbn","values":[null]}]\" 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Reasons Why Small Businesses Fail
Every year, lots of Canadians get the entrepreneurial urge and start businesses. Some of those small businesses become very successful and profitable. But every year lots of start-ups in Canada fail. Here are some of the key reasons that small businesses fail:
- The business is based on an idea that only a mother could love. A business idea may seem wonderful to the business owner, but a business needs a slightly larger market than the owner if it’s going to prosper. A business won’t last long if it offers a product or service that nobody wants or can afford.
- The business is undercapitalized. A business with too much debt will fail, even if it’s based on a great idea and is otherwise well run. The business has to make enough money to cover its loan payments as well as pay the owner. If a business doesn’t repay its loans, its creditors will pull the plug. Cash is king.
- The business doesn’t keep the customers happy. A fantastic business concept and good advertising may get the customers in the door — once — but it takes excellent customer service to keep customers coming back. Dissatisfied customers don’t pay their bills, won’t return, and won’t refer other customers. Without customers (who pay) the business will fail.
- The business doesn’t change with the times. A business must be able to adapt — what worked in the past may not work in the future. A business that doesn’t respond to the changing marketplace may find that there is no longer a market for its product or services, or that its customers have gone over to the competition.
- The business expands unwisely. Some unprofitable businesses expand in the hope that doing more business will increase profits — but expanding an unprofitable business just creates a bigger unprofitable business. And even a successful business that expands without proper planning may lose its core customers because it can no longer serve them properly, or may not generate enough new customers to cover the cost of financing the expansion.
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