25 Reasons Why Businesses Fail and How to Prevent It - Nehemiah Entrepreneurship Community

25 Reasons Why Businesses Fail and How to Prevent It

“Therefore whoever hears these sayings of Mine, and does them, I will liken him to a wise man who built his house on the rock: and the rain descended, the floods came, and the winds blew and beat on that house; and it did not fall, for it was founded on the rock.” – Matthew 7:24-25 (NKJV)

“Do Kingdom businesses fail like regular businesses?” 

The question above was asked by an accomplished Christian educator who was one of my early advisors and raving fans. This question confronted me early in my journey, during a pivotal moment as I was developing the concept of Biblical Entrepreneurship. At that stage, my understanding was evolving, but one thing was clear – being a Kingdom business doesn’t guarantee success, nor does it eliminate the possibility of failure. 


Since sin entered the world through Adam and Eve’s disobedience, death has become a part of the human experience. People and organizations die. However, just as you can extend an individual’s life through diet, exercise, and self-care, the life of a business can also be prolonged and fortified. Before delving into how to prevent business failure or, at the very least, extend its lifespan, let’s explore the top 25 reasons why businesses commonly fail.

Here are the reasons why:

  1. Under funding 
  2. Lack of planning 
  3. Inadequate management team 
  4. Ineffective marketing 
  5. Lack of preparation 
  6. Unwise counsel 
  7. Lack of innovation 
  8. complacency 
  9. Premature launch 
  10. Moral failure 
  11. Lack of community 
  12. Lack or insufficient systems 
  13. Rapid growth 
  14. Bad management
  15. Lack of focus and perseverance 
  16. Health failure 
  17. Government interference 
  18. natural disasters
  19. Marital instability
  20. Family dysfunction 
  21. Bribery and extortion 
  22. terrorism 
  23. Lack of clarity of purpose and mission 
  24. Pride 
  25. No exit strategy 

Drawing from my 25 years of experience working with entrepreneurs across diverse backgrounds, industries, and business stages, though you can not prevent business failure, I believe it is possible to increase your chances of business success by at least 50%. 


Here are the 4 key success factors to increase your business success rate by at least 50%:

  1. Training 

    According to the research paper titled “Do Ambitious Entrepreneurs Benefit More from Training?”, training in growth-catalyst tools helped entrepreneurs achieve a 72% increase in their ventures’ revenues, which is about 40% more than entrepreneurs who did not receive such training.  
  2. Schedule 

    According to the Harvard Business Review, Entrepreneurs who write formal plans are 16% more likely to achieve viability than otherwise identical non-planning entrepreneurs. 
  3. Coaching and mentoring

    A Survey by the UPS Store found that 70 percent of small businesses that received mentoring survived more than five years – double the survival rate of non-mentored businesses. The same survey found that 88 percent of business owners with a mentor said that having one was invaluable.

    A study by the International Coach Federation (ICF) reported that companies that used coaching saw improved team functioning, increased productivity, and better financial performance.
  4. Community

    Data from the Small Business Administration (SBA) in the United States suggests that businesses in supportive communities have higher survival rates. The community provides a safety net and guidance that can help businesses navigate early-stage challenges.  

    Research from Harvard Business Review found that peer learning in entrepreneurial communities accelerates the learning curve for new entrepreneurs.  

It is when you take advantage of these 4 success factors while being a part of the Nehemiah Entrepreneurship Community that you increase your business success rate by at least 50%. 

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