Milwaukee has always been a city of builders—tinkerers in Bay View garages, families running multi-generation shops along North Avenue, and entrepreneurs betting everything on an idea that could become the next local institution. But for every success story like Kopp’s, Sendik’s, or Milwaukee Tool’s renaissance, there are dozens of beloved ventures that quietly faded away.
Consider Boston Store —once the anchor of downtown Milwaukee retail. For decades it symbolized the city’s commercial confidence. But after expanding aggressively across the Midwest, the company found itself burdened with leases, debt, and too many locations chasing too few customers. The brand that once defined Milwaukee’s shopping scene became a case study in growing past your foundation.
That story echoes the experience of many small businesses today. According to research from UCLA’s Robert Fairlie, only half of new firms survive two years, and just a third make it to year five. Here are the 10 biggest reasons startups—and small businesses everywhere—fail, adapted with lessons from our own backyard.
- Going It Alone
“I’ve got this,” is baked into the cheese in Wisconsin, but building a business is a team sport. Even the city’s strongest brands—think Harley-Davidson or Colectivo—were not built by solo heroes but by partnerships with complementary strengths. Research shows “copreneur” couples perform especially well because they share values and support each other through the grind.
- Growing Too Quickly
Expansion feels good—until it doesn’t. Boston Store isn’t the only casualty of rapid growth. Remember Kahn’s Clothing? That was another multigenerational business brought to extinction by rapid expansion. Don’t outrun your cash flow.
- Lack of Experience
An MBA is great, but entrepreneurs who grew up in the trenches of family business are more likely to succeed. They learn the rhythms early: inventory, payroll, customer quirks, and the art of the excellent execution of mundane details married to a commitment to continuous improvement.
- Too Much Passion
Many entrepreneurs open restaurants or boutiques out of love for the craft. But passion can cloud judgment. When identity becomes tied to the business, it becomes emotionally impossible to pivot or close—even when numbers scream the truth.
- Internal Conflict
Disagreements are normal. Silent resentment is deadly. Whether it’s two brothers fighting over a Third Ward café or partners debating whether their startup should move to Madison for talent, unresolved conflict drains energy and destroys momentum. Healthy debate keeps a business honest; hostility or avoidance kills it.
- Getting Capital
Every founder knows the pain: big dreams, small checkbooks. Access to capital remains a top barrier, especially for minority-owned startups concentrated in neighborhoods like Bronzeville or Lindsay Heights. Many begin undercapitalized and never catch up. Creative lenders and community financing groups help, but the gap is real.
- Lack of a Market
You can’t open a restaurant because you love to cook. Plenty of great ideas fail because of a lack of market research. Your restaurant may have flourished in another location, or was at a price point that was unsustainable given other circumstances. The pick a shovel work of market study is unglamorous but necessary to avert disaster.
- External Shocks
Small businesses everywhere were hammered during Covid. Many neighborhood gems—from coffee shops to boutique gyms—closed simply because they lacked the reserves to wait out the storm. Small firms have thin margins and limited leverage; one shock can break them.
- Inability to Pivot
When the pandemic hit, some restaurants shifted overnight to curbside meal delivery including family-style take out Friday fish fries. Others waited for things to “return to normal.” Guess who survived? The market rewards creativity; it punishes nostalgia.
- Being Too Stubborn
This is the Midwestern Achilles’ heel. Grit is good—until it becomes inflexibility. Many failed ventures ignored advice, clung to outdated models, or refused to adapt pricing, branding, or menus. Leadership means listening, adjusting, and remembering why the business existed in the first place.