Why do Businesses Fail?

Published: December 23, 2019

Thus, this is the first of a ten-part series. The writer had written his dissertation (the writer has a Doctorate of Business Administration in Entrepreneurship and Business Management from California InterContineal University) in this area; of why do so many small businesses fail. Although scholars and researchers have developed several reasons why entrepreneurs fail, one of the reasons is that entrepreneurs have not developed a business plan. A business plan is a written document that looks into the future of an entrepreneur’s business venture and projects through research various outcomes, and what the entrepreneur should look for, and through research how to handle said subject matter when the phenomenon happens.

According to Haag (2013), 600,000 businesses are started each year in the United States, and only 200,000 will make it to year-five; why is that? Why are two-thirds or 400,000 small businesses failing within five years? Haag argued that they failed due to the lack of developing a written business plan by the entrepreneurs. Now think of this phenomenon this way, if this number was, reduced that is more jobs in the various communities, taxes collected by the government, and more revenue distributed in the diverse communities around the United States.

Researchers have found two main reasons why entrepreneurs fail is (1) marketing, (2) finances. As a Small Business Consultant, my Agency can help in both areas. We will talk about marketing at another time, but for now, let’s talk about undercapitalization, financing the enterprise. The two main ways entrepreneurs raise capital for their businesses are (1) equity, (2) debt. Equity is the money the entrepreneur invest in their company; this can come through borrowing from friends and neighbors for an interest in the enterprise.

Moreover, this can come from other external investors such as Venture Capitalist, Angel Investors, and the likes. However, small business still depends on debt financing for growing their businesses, and since the 2008 financial crisis, banks and other financial institution has lessened their loans to small businesses. So entrepreneurs have learned to put more equity into their enterprises in place of debt. Nevertheless, if organizations are going to grow, then an infusion of capital is needed for that transition, such as expansions, buying out a business partner, or needed inventory.

Our Agency has developed a partnership with a financial organization that has been in business for almost 20-years and has loaned nearly one billion dollars in loans to small businesses, and your firm can be next if you need capital for growth and any other business reason.

Financing Criteria

  • In business 5-years +
  • Minimum of $500,000.00 in sales
  • Not in a current bankruptcy
  • Less than perfect credit, we can help; credit scores 651+
  • We develop deep relationships with our clients and serve as their business and financial consultants through the lending process and after funding
  • We are specialists in small business financing and small business consultants
  • No collateral needed under $750,000.00
  • Current 3-months bank statements

Moving forward

We can offer you with an instant quote, and the amount that you can qualify for (based on underwriting of your business criteria) through our loan calculator. Call us at (866) 400-3040 from 9-9 PM CST Monday-Friday and 10 am-5 PM ON Saturday‚Äôs closed Sundays; we are nimble and will bet back to within the hour. Loan approval within 24 hours and funding in as little as 3-days. We have offices in Southfield, MI. and downtown Chicago, and members of the BBB in both locations. Moreover, go to our website to learn more about who we are and how we can better be of service to you and your organization, www.donaldemitchell.com.

Please sign up for our blog; we encourage your comments. Our motto is, we aim to please-always!



Haag, A.B. (2013). Writing a Succesful business Plan; An Overview. Workplace Health & Safety. Vol. 61, NO. 1, 2013, pg. 19-29.

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments

Would love your thoughts, please comment.x