Mark Lyttleton: The Most Common Reasons for Start-Up Failure

With 31.7 million small businesses in the US alone, many people harbour dreams of launching their own venture, presenting an enticing opportunity to pursue their passion full-time while potentially creating a lucrative revenue stream.

Nevertheless, starting a business tends to be a lot harder than most founders predict. As of 2021 (according to the Bureau of Labor Statistics), 20% of small businesses failed within 12 months, with 50% failing to make it to their five-year anniversary and just 35% surviving for a whole decade.

Angel investor and business mentor Mark Lyttleton works with both public and private companies, helping to position them for success. From poor financial management to a soured business partnership, this article will explore some of the most common causes of start-up failure, sharing strategies to avoid them.


Lack of Funding

The most common reason for business failure is a lack of money. Founders may fail to secure sufficient investment at the outset, or the money may run out simply because it stops coming in. Perhaps sales were not as high as anticipated or finances were poorly managed.

In order to survive and scale, a business needs to obtain sufficient funding, particularly in those all-important early days, until it starts generating profits.

Inadequate Research

To be successful, a business needs to exploit a gap in the market, providing a product or service that meets that consumer need.

Too many entrepreneurs go into business with absolute conviction in their product, only to discover that there is actually no market for it. It is therefore crucial to conduct in-depth research of the market, helping business leaders to understand exactly how they can fulfil customer needs.


Many entrepreneurs launch their venture with the intention of transforming a passion into a lucrative vocation. Brimming with enthusiasm about what they are doing, they may be blinkered, believing that there is enough room in the market or that they are better than their competitors and can usurp them.

Although positivity and enthusiasm are a must for any business leader, the sad reality is that without a degree of real expertise and business skills, these founders are destined to struggle.

Weak or Fractious Leadership


A great leader recognises their weaknesses as well as their skills, delegating accordingly. They communicate adeptly, rewarding employees and providing opportunities for personal and professional growth – creating happy, effective and loyal teams prepared to give their all.

Conversely, poor leadership demotivates teams, which can easily cripple a business. When business partners fall out the results can be catastrophic, triggering a tussle for ownership and control and casting a shadow over the business’s survival.

Tips to Avoid Business Failure

It is crucial for business leaders to establish goals, monitoring progress towards objectives. In addition, in-depth research is vital prior to launch, gauging consumer demand, price points, competitors and the overall market overall.

Bearing in mind the colossal commitment required to build, operate and scale a business, entrepreneurs need to invest in a business they feel passionate about, helping to reduce the temptation to quit when times get hard and coaxing them to press harder and do whatever it takes to make their business a success.


I am a committed and seasoned content creator with expertise in the realms of technology, marketing, and WordPress. My initial foray into the world of WordPress occurred during my time at WebFactory Ltd, and my involvement in this field continues to grow. Armed with a solid background in electrical engineering and IT, coupled with a fervor for making technology accessible to the masses, my goal is to connect intricate technical ideas with approachable and captivating content.

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