Worrying Signs Your Business Is Doomed To Failure From The Get Go

For every Uber, Google or Facebook, there are a million companies that didn’t make it. If companies were people, their bodies would be piled high in the streets, and every cemetery would be full to bursting.


It’s a shame that we don’t talk about these failures more often. Perhaps if the problems were identified more regularly, fewer entrepreneurs would get into such a mess. There’s a lot of fogging and self-attack that goes on in the entrepreneurial world. So the question here is what failures really do mean that businesses are doomed before they even get going? Let’s find out.

Failure Number 1: Your Business Is Built On Top Of A Legal Landmine

Businesses are under constant threat of being shut down, especially if they don’t sort out their legal matters quickly. Take Grooveshark, for instance. Grooveshark was a music discovery company, a little bit like Pandora. The idea was to connect customers with their favourite music and introduce them to new material. But Grooveshark made some serious errors at the beginning of their venture. For instance, they failed to secure licenses and right to use the music that was on their platform. The company later admitted that they had made a mistake. After ten years in business, they were shut down by the authorities, never to be seen again.

The moral of the story? Always secure the necessary legal rights before starting a business.

Failure Number 2: You Do All Your IT In-House

Data breaches in business and in public life are surprisingly common. We tend to forget breaches quickly after they happen, but a cursory glance at the history of breaches shows otherwise. And it’s not just small businesses that are getting affected by data breaches. It’s big companies too. Take Morrison’s supermarket, for instance. Morrisons had its entire workforce database hacked, losing data on more than 100,000 employees in total.

Or what about Moonpig? The gift card company failed to heed the advice of a researcher than said that its customer database was vulnerable to attack. It was a scandal.

Commercial IT support for small business owners has gotten much better over the last few years. There’s now a comprehensive emphasis on security, helping to make hacking a less common occurrence. Entrepreneurs need to avoid trying to go it alone when it comes to security and get somebody with expertise to help them. Losing your data can cost you your livelihood and your brand.

Failure Number 3: Tagging Along With Another Company

Many companies make a lot of money by tagging along with another company’s services. Just think back to the SEO world just a few years ago. There were dozens of SEO agencies, all promising to get your website to the top of Google search results.

Then, Google changed the way it did it’s ranking, and suddenly all their efforts were in vain. No longer could SEOs spam backlinks from disreputable sites to boost their ranking. Google was on to them. The same happens for many startups today. They latch onto one particular niche that depends on the action of another company. Then they go out of business as soon as that company changes how it operates.

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