Why Most Small Businesses & Companies Fail.

Only 50% of small business with employees will live to their 5th year. Learn from the entrepreneurs who shut the doors to their company. 


Mobius Agency is in it’s infancy. We are scaling slowly while attempting to establish the best processes, positioning, and work that we can achieve given our hectic schedules. In fact – we haven’t even devoted 90% of the time to Mobius that we do for our own client’s brands. This is the curse of the growing creative agency. One that we would do well to avoid.

But if we do fail – we can take solace in the many entrepreneurs that have come before us and failed, and the many yet to come. You may be in a state of flux with your own company. Or perhaps you’re company is doing so well, that you wish to continue breaking down the barriers of knowledge that build when owners are inundated with the day to days.

Here we’ll break down some of the most common reasons small businesses fail. And in doing so – may help prevent you from making the same mistakes as the entrepreneurs in CB Insights study.


A breakdown into why good businesses ended up failing.


  • 42% of businesses fail after realizing their is no current market for their product.
  • 29% failed because they ran out of money – and were unable to keep their employees paid.
  • 23% failed due to hiring the wrong team for the company.
  • 19% were beat out by the competition.
  • 18% failed because of pricing and cost issues.
  • 17% failed due to a poor product offering.
  • 17% closed doors for lack of a business model.
  • 14% failed precisely because they had poor marketing.
  • 14% were in deep water after ignoring their customer’s feedback.
  • 13% failed due to poor product timing.
  • 13% failed on account of lost focus.
  • 10% failed by failing to pivot appropriately.
  • 9% of the failed businesses reported lacking passion.
  • 9% failed due to poor location.
  • 8% failed without financing or investment.
  • 8% failed because of legal challenges.
  • 8% failed on account of under utilization of advisers or networks.
  • 8% burnt out.
  • 7% failed to pivot in a timely manner.


Keep in mind – these are self reported reasons as to why these businesses failed; and there are innumerable reasons as to why a business can fail today. An interesting side note being that companies without partners tended to fail in higher margins – and teaming up with a good agency should be a partnership.

While we wont be writing your businesses plans for you, or sourcing manufacturing for your goods, Mobius acts as a good creative agency should: by creating a solid framework for which your business can expand, grow culture, and beat out the competition.


We are currently taking on new projects. Would you like to discuss yours?

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