Nobody wants to fail. For businesses, all kinds of ways will be done to develop the business. But without realizing they are doing negligence that is the cause of a failed business.

The United States Small Business Administration conducted research entitled Redefining Small Business Success.

As a result, around 66 percent of new businesses can last two years or more, 50 percent last at least four years, and only 40 percent last six years or more.

Causes of Business Failure

Do you have a business? How long has it lasted? Already past the sixth year? If yes, good luck with your business. How about just starting a business? See 8 causes of business failure due to negligence.

1. Business Plan

As a business person, making a business plan is an obligation. Because the business plan will map the business background, objectives to be achieved, strategies, development plans, analysis, to finance.

Implement a disciplined business plan when you run a business and see how it develops. If you are not disciplined with a business plan, this will be the cause of business failure.

2. Understand Market

Maybe your product can be used by everyone. But don’t generalize the way to market a product. Determine the target market and understand their behavior plus their desires.

To find out their behavior, do a small survey through the survey application or take advantage of the polling feature on Instagram.

Ask about whether your product fits your target market? Do they use more competitor products?

What are the advantages and disadvantages of your product with competitors? Also ask about age, marital status, and expenses.

This is an insight into your business marketing strategy. To attract their interest in filling out surveys, give gifts (products, pulses or shopping vouchers) to five or 10 people.

3. Marketing Strategy

After understanding the target market, do a marketing strategy. If you execute the wrong strategy, your business can get messy. Having a comprehensive strategy will make it easier for you to run a business.

Marketing strategy does not have to cost a lot, really. If you are not budget-minded, do the cheapest strategy on a digital platform or give a special price.

Also, send the product to several friends and ask to review their social media or blogs.

You can also collaborate with other brands to run the giveaway program. This can be a branding awareness while increasing followers for both brands.

4. Information

It’s okay to focus on marketing or busy selling products as much as possible. Out there, there is important information that might be useful in developing your business.

It’s good, do not neglect to update business information, economics, global issues, and glance at the performance of competitors. What did they do? Are there any cool and innovative new products?

5. Managing Finances

Unwittingly, sometimes the business owner mismanages finances. Because businesses need healthy, planned and detailed cash flow.

Calculate capital, production costs, marketing costs, selling prices, employee salaries, and don’t forget to separate personal and business money

If you mismanage, the business may be destroyed.

What if you need fresh funds but empty cash? You can borrow from banks or non-bank institutions. But remember, do the calculations in detail. Don’t or no, this only adds to your burden.

6. Product Quality

What you sell, both products and services, maintain its quality. Sometimes business owners forget that maintaining quality is as important as increasing quantity.

The reason your new product sells well, even sells thousands of pieces a day, is quality. Avoid lowering quality standards, to save on production costs. Unless you want to make ordinary products.

7. Bad Service

Customers will be lazy to buy if your service is bad. This applies to customer service on social media or the marketplace, your delivery service is in trouble, and handling complaints against customers is disappointing.

If you have done your best, but the customer is not satisfied. Apologize and offer a solution. Indeed, not everyone who asks about your product will buy. At least don’t leave a negative impression on them.

8. Messy Management

This is not about financial management. But messy management can be the cause of a failed attempt. Business management includes planning, organizing, controlling, and communicating between owners and employees.

If you work alone, for example having an online store in the marketplace, check all processes one by one. Make sure business management runs smoothly.

9. SWOT analysis

If the business crashes, you can’t help but have to review again what causes the business to fail. Start from reviewing business plans to management. Do a Strength, Weakness, Opportunity, and Threat (SWOT) analysis of your business.

Note what are the strengths and weaknesses of your business products. Write down opportunities or opportunities that can be used as well as threats that accompany the product. This is to identify problems and formulate new business plans.

10. Strengths

export quality linen from a clothing factory, a clothing model combining two materials, and a freeze cutting model.

10. Deficiency

lack of material supply because it relies on the rest of the factory production, less labor because it is done alone.

11. Opportunity

Not a few buyers who pay attention to the matter of slow fashion and sustainable industry, a lot of demand.

12. Threats

the remaining stock of production materials, some brands produce linen clothes and endorse artists.


After that, divide the four into the classification of internal factors and external factors. Then decide which one you will prioritize and do it right away. What are your plans for things that don’t support the business?

Running a business is not easy. You need time, experience, keen to see opportunities and work hard. On the other hand, you also need to adapt to various business situations. Sometimes not all failures because of the owner’s fault. Poor economic situation can also be a cause of business failure.

If the business is running smoothly, don’t forget to set aside profits for the investment. Investments not only save funds but can provide returns. For the latest information and ways to invest,