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Why Do 33% of Businesses Fail in the First Year?

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The researcher’s report graph underlines the exponential failure of startup business reaches 33% every first year and 45% within 5 years. And, the total percentage that can basket the ball is only 25%. These statistics have been constant since 1990. There are still odds that have got shutters down just after few days of inauguration as their account receivable management was weak.

According to researches by Investopedia, 784,715 new businesses were set up in 2019 and almost 523,414 got failed in a tenure of 2 years. However, to not be counted in a failed business column, you need to have full proved research for your business.

With good research, planning funding, and flexibility, businesses can find success and growth. We will walk you through the biggest mistakes startup business makes and best possible practice to improve the chances of success.

Top 6 Reasons Startups Fail

At times people focus on major tips and neglect the basic points that are the backbone of your business. Thus, here are those points that are neglected by new businesses that failed to rise. Let’s check out:


Too Little Financing

It’s rightly said that you should start your business with less investment but less doesn’t mean avoiding the important sectors to invest in.

Like, if have a newly launched product and you haven’t invested in good marketing then there will be no market reach. Thus, there will no sale and you will be again at loss. Therefore, it’s necessary to know where financing is required in your business to build it strong.

Mismanaged Cashflow

Having a track of money is very important in any business. This is the major fault every startup does. They fail to have cash flow management and this brings them to a bankrupt position.

For this, you need to have cash flow management from day 1. It’s true, it becomes difficult to maintain a diary for your every outflow and inflow of cash. To overcome this many business sectors are using Invoicera for all online invoicing and cash flow management.

You can also use Invoicera software to manage your cash without much interaction. It will keep all your cash flow automatically without any glitch.

With account receivable management services you can check your transactions, investments of any year. The details are saved on the cloud.

For instance, if you are into real estate business, you are selling 2 flats and keeping 8 flats on rent, Invoicera will play a big role here. It will keep track of all rent receiving, maintenance automatically updates the actions.

The multiple features of this online billing software will avoid human error.


Once your budget is finalized then start your planning. Plan what will you include in your business. Make a list of pieces of equipment and products. Also, plan how many staff is required for your business. Last but not least in planning is you should have account receivable management software for proper management of your cash flow.

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