Why do most remote businesses fail?

There’s a well-known research outcome floating around that says 90% of startup companies fail within their 3 years. This is true for remote businesses — however, a study has never been published yet. My bet, remote businesses fail within their first year or even faster. There are a couple of reasons for failure but only a handful of them that we can pick as truly ‘remote business fails’.

1. Fear of missing out

Remote business is not for everyone. Of course, for the right ones, a remote business can help to boost a company’s growth and reshape their business. But it can also ruin one. Just because there’s a buzzword, you shouldn’t jump on the wagon.

Before you commit yourself to run a remote business, ask yourself: is my business plan really built for remote business? Will a remote business serve my goals? Before stepping to the scene, you need to evaluate your own plan. Most businesses fail because they don’t have a strategy from day 0.

2. Geo-arbitrage is the goal and not a business asset

Being a remote company means you can operate from anywhere. But harnessing the geo-arbitrage shouldn’t be your end-goal. In other words, if you can’t be successful without the remote business model, you won’t succeed with it. This is true for most digital nomads as well, by the way, they buy their ticket to a nomad resort in SE Asia and start their freelancing work. But they are struggling and mostly blogging about how little budget they need to live there. That is not success — its failure.

First, try to be successful in the market in your home country. Then, you can move and harness the power of geo-arbitrage to boost yourself further. But relocation should not be your goal. Don’t just build a remote business because you want to save money.

3. The shiny object syndrome

Well-known problem — you are committed to building a remote business but you deal with anything that can fly. Losing your focus will cost your growth. The ones who make the most money are the ones who have a simple plan, a simple offering and a narrow focus on their product or service. You can’t be Elon Musk — I doubt that even he can be himself and successfully run at least 3 different companies. You also can’t be a generalist, you have to position yourself. There’s a great deal of noise on the market and only those can succeed who don’t fall into the shiny object syndrome and commit their business to solve or work on one key issue or problem. This is especially true when you have a remote business and while everything can be anywhere, your front shop is online — harder to maintain a personal network and connections with referrals for a generalist.

Of course, there are more reasons for failure, like hiring bad team members and working on products and services that don’t generate real value — but these 3 above are the ones where most of the remote businesses bleed out on the first place. If you fail on these ones, the lifespan of your business won’t be longer than months only.



At Anywhere Consulting, we help entrepreneurs to launch, build and grow their remote business. We provide support and consulting services as well as educational products to overcome the challenges of remote businesses. If you are a freelancer who wants to launch a distributed business or you already have an established business but want to grow remotely, we can help you.