Starting a new business? Get 40% off our accountancy services for 3 months! 😀


It’s a sad fact that most businesses fail within the first 18 months of operation. There can be a multiple of reasons for it but here are some of the most common:

Cash flow problem

Simply running out of cash is one of the most common reasons businesses have to close down. This could be due to poor planning or unexpected costs. If the money is only coming from one source, say a loan or an investor and they disappear, then your business is left dry and forced to close in a lot of cases.

Not enough market need

Did you research the market before you went into it? A surprising amount of business owners don’t research well enough and simply think the opinions of their friends and family are enough research to make it work.

You need to research your market to check whether there is a need of your product or service and whether it’s a need that will last a long time and give you a sustainable business.

Not listening to customers

You might not be outright ignoring them but if you’re not taking the time to ask them what they want from a business like yours then you’re essentially going in blind. How are you meant to give them what they want if you don’t know what they want?

No planning

Have you made plans for your business over the next few months and years? What’s your next step to expand? Businesses with unsteady cash flow in particular are solely focused on keeping afloat so there’s not a lot of thought for the long term future. If you don’t plan ahead though, your business model runs the risk of becoming stale and left behind the competition.


Some people get ahead of themselves in business and throw money in all directions too soon. Expansion is great, but it needs to be controlled and careful. Whenever you put new money into the business, you need to know where it’s going to come out too.

Not keeping with the times

Your business needs to be flexible to adjust to market changes, economic changes and new developments in policy and technology. If you are not willing to move with the times, then as the saying goes, you will get left behind.

You started it for the wrong reasons

Finally, one of the reasons why businesses fail is because you started it for all the wrong reasons and your heart wasn’t really in it. If you don’t have the drive and the passion to make it work, it’s so much harder to make a success of it. So if you started it for money, then have a think next time about a business that means more to you than just that.


What do you think are the top reasons why businesses fail? Have you ever experienced any of the above? Let us know your thoughts.

About The Author

Kara Copple

An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.

More posts by this author
Inline Feedbacks
View all comments

Read more posts...

Architects and Tax

Architecture is a highly diverse sector when it comes to tax. It’s partly down to the type of businesses that carry out…

Read More

June 2022 Client of the Month: Manea Kella

This month we spoke to Adrian Manea, architect and director at Manea Kella, a London based RIBA Chartered architecture and interior design…

Read More

Succession Planning for Business Owners: What Comes Next?

When you own a business, it’s extremely normal to feel like you’re surviving one day to the next – ‘winging it’, as…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.


You only need this service if you want us to complete the bookkeeping on your behalf.

Would you prefer to complete your own bookkeeping?


Call us on 020 3355 4047 if you’re not sure.