Why are businesses closing? in the first three years of existence? This is perhaps the most popular question on any entrepreneurship panel. And most often you hear hackneyed but absolutely useless answers: “high taxes”, “greedy landlords”, “crisis”, “sanctions”, “unqualified personnel”.
I would like to say: stop. All these are small nits that attack an already dead body. These are excuses for those who do not want to admit their incompetence.
Analyzing why are businesses closing?who went through our agency DOM-Marketing at the rescue stage (when they are already “stuck” and the money in the account is melting), we see a completely different picture. Reason number one is not the outside world. This is a total systemic failure within the company itself. This is a lack of engineering thinking on the part of the owner.
In this article, without pity or rose-colored glasses, we dissect the real causes of the collapse. If you recognize your company in at least one point, you have a maximum of six months to change the trajectory, otherwise you will face liquidation.
Reason 1. The Illusion of a “Good Product” and Marketing Blindness
The first and most important reason why are businesses closing? is a naive belief that “a good product sells itself.”
You have opened a shawarma shop with the most delicious meat. Or they launched the production of unique 窗帘 (curtains). You spent everything on the product, on renovating the premises, on equipment. And when the moment comes to enter the market, you realize that there are no people around. And you start doing “marketing” in the form of reposts to a personal VKontakte group or handing out flyers near the metro.
In 2024, product is only 20% of success. The remaining 80% is distribution. If people don't know you exist, your masterpiece will rot in a warehouse.
Symptoms of the disease: The owner considers marketing “wasted money.” He demands that an advertising campaign pay for itself from day one, without realizing that the customer acquisition cost (CAC) at the beginning is always higher than the customer lifetime value (LTV) because there is no retention system.
Medicine: Stop skimping on your digital presence. Professional developed online store or showcase website - this is not a “business card for show”. This is your main sales representative who works seven days a week. If your website looks like a piece of garbage from 2015, you automatically lose 70% of your credibility before the client even calls you.
Reason 2. Saving on the foundation ("Let's do it on our knees" syndrome)
Look at_statistics (statistics) of bankruptcies. Most small businesses die from cash burn. And this gap is artificially created by the owner himself due to incredible stupidity - saving on IT infrastructure.
Let's trace the chain that leads to the crash:
- The owner decides order website development. He is offered to do everything right (analytics, clean code, integration with CRM, loading speed) for 500,000 rubles.
- The owner is afraid of the amount. Finds a student for 30,000 rubles. A student makes a website using a crooked template.
- Contextual advertising is being set up. Traffic is moving. But the site loads in 6 seconds. Half the people leave before they load (Core Web Vitals in zeros). Conversion - 0.1%.
- Leads cost a lot of money. The budget is burning.
- Due to the crooked website, there is no integration with CRM. Managers do not see applications on time. The client gets tired of waiting and goes to a competitor.
Result: The owner concludes: “Advertising doesn’t work! The Internet is a scam! It turns off advertising. The flow of clients is drying up. Business is dying.
If you think why are businesses closing? in your niche, look at their websites. If they are made “for show” on designers, are not adapted for mobile devices and do not follow SEO rules, they are doomed. You can't build a skyscraper on a foundation made of sand.
Reason 3. Zero unit economics (Blind management)
This is the diagnosis of 90% of entrepreneurs in Russia. If you don't know your unit economics down to the last penny, you're not running a business, you're playing roulette in a casino.
Unit economics is the calculation of the profitability of one unit of product or one customer.
- How much does it cost to acquire one customer (CAC)?
- How much margin do you get from one trade?
- What is the cost of serving a client?
- What is the frequency of repeat purchases?
Why are businesses closing? because of this? Because the owner only looks at the “revenue” at the cash register. He sees: “Hurray, today’s revenue is 100 thousand!” But he does not consider that he spent 80 thousand on advertising, 15 thousand on logistics, and 20 thousand on salaries. Result: minus 15 thousand per day. The more he sells, the faster he goes bankrupt. This is called “growing negative.”
In digital marketing without unit economics, including advertising is financial suicide. You must know for sure: “I can pay no more than 50 rubles per click. If the price per click rises to 60 rubles, I will go into the red.” This mathematics should be calculated by the site through end-to-end analytics. If you don't have this, you are a blind person driving a car on the highway.
Reason 4. Dependence on “star” sellers instead of a system
Services and complex B2B are the main reason, why are businesses closing? is a risky sales model tied to specific people.
You have Vasya - the “king of sales”. It brings (brings) 70% of all revenue. He knows all the clients by heart, keeps connections in his head, and conducts transactions in his personal notebook or in Excel. You pay him a huge percentage, you are afraid to deprive him, you turn a blind eye to his absenteeism and rudeness.
And then Vasya goes to work with competitors (or opens his own business). And along with it, 70% of your revenue goes away. The business collapses within a month.
Systematic approach: The transaction should not depend on the person. The entire client journey (from the first click on an advertisement to signing the document) must be recorded in the CRM system. History of correspondence, call records, tasks, documents. If Vasya leaves, Petya comes in his place, opens the client card in CRM and continues to conduct the transaction without losing context. If you still manage clients in notepads or instant messengers, you have created a business for your employees, not for yourself.
Reason 5. The market is always to blame (Lack of flexibility)
“Sanctions are stopping us,” “Customers are now poor,” “Yandex algorithms have gone bad”—this is the favorite song of losers.
Yes, external factors influence. But look at the competitors in your niche. Someone is making money under these same conditions! Why?
Analyzing why are businesses closing?, we see an inability to pivot. The business is built on one rigid business model. If it breaks down, the owner sits down and waits until “it gets better,” continuing to pay rent and salaries from reserves.
In the digital environment, flexibility is the main weapon. If advertising in Direct doubles in price, we instantly redistribute the budget to SEO or targeting. If user requests change, we change the structure of the site. You can see how we changed strategies for our clients during periods of crisis in our completed cases. There is no magic there, there is tough analytics and quick adaptation. The business that doesn't analyze the numbers and doesn't change is the first to die.
Reason 6. Emotional burnout of the founder (Chaos instead of processes)
This is the most hidden, but the most common physical cause of death of companies for 2-3 years.
The founder is the locomotive. In the first year, on adrenaline, he works 14 hours a day: he sells himself, closes deals himself, unloads goods himself, sets up advertising himself, repairs the printer himself.
But in the second year the adrenaline ends. But the processes are not built. No instructions. There is no one to delegate and nothing to delegate (it’s all in the head). Chaos begins. Weekends are cancelled. The family is falling apart. Health is going downhill.
The founder begins to hate his business. He realizes that he created not a company, but a prison for himself. And at some point he simply gives up: he closes the individual entrepreneur, dismisses people and becomes a hired manager, vowing never to be an entrepreneur again.
How to avoid this? Business needs to be designed as a mechanism that can work without you. And this is impossible without digitalization. Automation of lead generation, auto-responders in instant messengers, strict regulations in CRM, clear job descriptions. You should be the architect of the system, not the most important worker in it.
Summary: Business is engineering, not a lottery
To summarize, let's answer the question, why are businesses closing? in the first three years, in one sentence: Their owners build the illusion of a business instead of a real profit-generating system.
They save on the website (the face of the company), do not consider unit economics (they do not know mathematics), keep everything in their heads (they do not have IT systems) and blame everything on_PUTIN (Putin/crisis/sanctions).
If you want to be part of the 10% that survive, scale, and become market leaders, stop treating your business like a hobby. Treat it like IT infrastructure. Every process must be digitized, every lead must be counted, every ruble of the marketing budget must bring a measurable result.
Stop building a business on sand, trust it to the professionals
We are in DOM-Marketing We don’t just make “beautiful websites”. We treat systemic business diseases through digital tools. We implement analytics that open your eyes to real numbers. We build websites that don’t just hang on the Internet, but squeeze maximum conversions out of every ruble spent on traffic.
Don't wait for the cash gap to hit you. Audit your system now.
📞 Sign up for a tough but honest business audit: 89617842290 🌐 Go to the agency's website: dom-marketing.ru ✈️ Write to Telegram: @Dkrasilnikov
Stop being a statistic. Be the exception.
Do you agree that the main reason for the collapse is in the head of the founder? Share in the comments which mistake from the list you made at the start! Subscribe to the channel - there are no soothing fairy tales here, only working schemes.
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