Five Reasons Why Businesses Fail Within the First Six MonthsMany, many businesses fail in the first six months. What are the reasons why businesses fail so often in those first, key months?

Generally speaking, new businesses go through a number of stages that determine where the enterprise is headed.

How they perform during these stages well set the trajectory, and often be the test for whether the new business is strong enough to progress further.

The six-month mark is especially critical, and can clearly indicate what lies ahead—success or failure.

So says James Jorner, a contributor to Business 2 Community, who notes, “Most businesses don’t make it past the first half of their one-year anniversary.”

Here are five reasons why businesses fail so quickly. 

Five Reasons Why Businesses Fail

The New Business Solves No Genuine Problem

What problem is your new business designed to solve?

Thomas Oppong explained the importance of having a business that solves a problem in Entrepreneur:

Focus on building a must have not a nice to have product. Consumers are overwhelmed with the paradox of choice on daily basis. Attention spans are getting shorter in the age of multi-tasking and only few products are getting noticed – with many being a solution for a must not a want.

“Most people found their business after only coming up with an ill-thought idea on how to solve an irrelevant or non-existing problem,” Jorner says.

After some time passes, “usually building up to the first six months of starting the business,” it becomes clear they’re not actually solving anything.

That lack of focus on problem solving is one reason why businesses fail.

Profit is the Driving Factor

Of course profit is a prime motivator for any fledgling business. But if it’s the only driving factor, the business usually can’t last long.

The main reason?

“The business is going to charge in excess of the market rate” and customers will likely respond poorly, Jorner says.

Being overly profit-conscious is another reason why businesses fail.

This hyper-focus on profit gets in the way of a business doing everything it can to serve its customers, “thus impacting the quality of its output in a negative way.”

The New Business is Run Poorly

A business is only as strong as the leaders who run it.

A common determining factor for a new enterprise’s longevity is the quality of individuals who manage it—and poor leadership is one of the leading reasons why new businesses fail.

Business leaders must possess a wide range of leadership skills in order to pull this off, but in Jorner’s view, experience is the ultimate element.

“Someone who has prior experience working in a similar position has a greater chance of leading the business to success than the one with no prior experience,” according to Jorner.

New Business Owners Tend Toward Procrastination

Many priorities must be addressed when getting a new business off the ground, some more intimidating than others.

Some entrepreneurs become overly cautious about taking a necessary bold step and fail to “pull the trigger” in time.

Failing to act is one of the main reasons why businesses fail.

While all key moves should be fully considered before taking action, “especially when it affects other people,” the most critical action is making your mind up on time.

Too Much Attention is Devoted to the Competition

Jorner contends “focusing on competition is a major contributing factor to killing a business.”


First of all, it can become a major distraction (or obsession).

Also, it may lead to your business “eventually becoming another copy of your competition.” Instead, the focus should always be on designing the best product or service.

Knowing why businesses fail can help you avoid a similar fate.

If you avoid these “new business” mistakes, you stand a much better chance of seeing your enterprise grow and prosper beyond its first six months of existence.

What else can business owners do to strengthen the life of their business?