(Add to Favorites | View All Articles | Resource Directory)
|
|
|
How to Avoid the Most Common Reasons for Small Business Failure
The life cycle of the typical small business is short and painful. It starts out with a dream and ends with a whimper. And in between, a struggle of Herculean proportions is played out as the owner tries to figure out why the business isn't succeeding. Depending on which survey you read, up to 80% of small businesses fail. Most fail within the first five years and those who survive the first five are often losing money. Pursuing a career in small business ownership seems like a fool's footpath straight to failure and poverty. So, what is the difference between the 80% that fail and the 20% that succeed? When you examine the reasons that cause business failures, you begin to understand that most business failures are preventable. The major missing ingredient is knowledge. Business owners who get expert help before they open a business have a much greater chance of succeeding. Business owners who get expert help as their businesses grow and change succeed more quickly with fewer speed bumps along the way. Why do businesses fail? A study published by Jessie Hagen of U.S. Bank gives the details of the top reasons for failure: General Business Factors ? 78% - Lack of a well-developed business plan, including insufficient research on the business before starting it. ? 73% Being overly optimistic about achievable sales, money required and about what needs to be done to be successful. ? 70% Not recognizing, or ignoring, what they don't do well and not seeking help from those who do. ? 63% Insufficient relevant and applicable business experience. Financial Factors ? 82% Poor cash flow management skills/poor understanding of cash flow ? 79% Starting out with too little money. ? 77% Not pricing properly - failure to include all necessary items when setting prices Marketing Factors ? 64% Minimizing the importance of promoting the business properly. ? 55% Not understanding who your competition is or ignoring competition. ? 47% Too much focus and reliance on one customer/client. Human Resource Factors ? 58% Inability to delegate properly - micro-managing work given to others or over delegating and abdicating important management responsibilities. ? 56% Hiring the wrong people - clones of themselves and not people with complimentary skills, or hiring friends and relatives. To get your own business on the right side of the 80/20 split, assess your business to see if any of these Failure Flags exist. Then, systematically eliminate them. And if you don't have all the skills you need, hire an expert to help you. The cost of having a professional on your team is far less than watching your business join the 80% club. Caroline Jordan is a small business coach and mentor working with small business owners to conquer the skill gaps that prevent success. For a free special report called Seven Secrets for Small Business Success visit http://www.TheJordanResult.com. Get Knowledge. Get Focus. Get Results.
MORE RESOURCES: News provided by Yahoo! News and Google News Velazquez on "Small Business Administration Information Technology" GetApp.com Taps Small Business Expert Denise O’Berry for Chief Editor Post Bill Aims to Simplify 1099-Ks for Small Biz - Reuters Small business owners feel pressure from new competition Small Biz Owners: Big Businesses, Millionaires Not Paying Fair Share - OMB Watch 8 Legal Steps for Starting Your Business Citibank Survey Finds U.S. Small Businesses Have Greater Confidence in Jobs and Consumer Spending |
|
|
|
RELATED ARTICLES
Incorporating a Small Business: S corporations versus C corporations If you've been considering incorporating your small business, you've probably been confused about the difference between S and C corporations.The similarities between S and C corporations are as follows:1. A Day in the Life of a Self Employed Professional It's Monday morning and Connie the Consultant sits in her executive office chair overseeing her business empire. Her desk is strewn with half finished projects, several weeks worth of to do lists (none of them completed), scribbled post it notes, and a permission slip for her daughter's field trip to the Planetarium that should have been turned in last week. 11 Things Small Business Owners Can Learn From Tiger 1. There Are No "gimmes" - They count two-foot putts on the PGA Tour. The birth of the Virtual Assistant phenomenon and why you should use one Outsourcing is the strategic use of outside resources to perform activities traditionally handled by internal staff and resources. Small business owners can outsource non-core functions to specialized and efficient service providers. Increase the Wealth in Your Community Many of us have noticed how some nearby communities seem to be "wealthier" than other nearby communities. They seem to have more shopping markets, more restaurants, more choices; items often cost more in these communities than they do in surrounding areas, yet the affluence remains where the prices are high; people are drawn to these communities, bringing even more resources and more wealth. Look Like Sizzle, Be The Steak You've heard marketing and advertising gurus quip, "Sell the sizzle, not the steak." Advertising initiatives best reach their target audience with benefits and the "wow" effect, not the value or features of their product or service. 25 Valuable Phone Numbers For Small Businesses Success Starting and growing a small business can be a daunting and sometimes lonely process we have compiled a list of 25 helpful phone numbers for agencies and services that work with small businesses. They can give you information, ideas, and resources to help you be more successful. 10 Ways to Start a Business on a Budget If you've been thinking about starting a business, but are held back due to cash-flow issues, there are plenty of ways you can get your plans off the ground. Though your vision may be to own a big store, restaurant, warehouse, or office, consider starting on a smaller scale. Operational Aspects on P and L Statements of Mobile Services Businesses What kinds of things effect mobile service businesses P and L's? Well this is an excellent question and as I see the Annual reports of companies who do mobile services, such as Ecolab, Service Master, Halliburton, Luftstanza Food Services, etc. I see many similarities. What Happened to the Money and Freedom? Ask anyone trapped in a cubical about their entrepreneurial dream and they will tell you, "I want to own my own business. I'll make more and have more time. Comparing Boston Area for a mobile car wash business The Boston suburbs seem to be rich with possible locations to wash cars and a mobile car wash would be well served in that market. The customers have good jobs, high paying salaries and indeed demand such personal car washing services. How To Start A Blind Cleaning Business Quickly And Easily Starting the blind cleaning business is one of the best marketable business ideas you could latch on to. If you give the requisite amount of time and dedication, there will be no cap on your earnings. Starting your first business - some sound advice It seems so long ago that I started my first business. Since that time, I've created several successful businesses and learned a lot of lessons along the way. Improve your odds of getting that Small Business Loan To get approval for your small business loan application, you must be able to meet the lending criteria set down. Some organisations are more risk averse than others, and will therefore have more stringent criteria. Business Relationships Defined What makes a business relationship?What really makes a business relationship? This may be very hard to define as it goes beyond just meeting the person and chatting about something you have in common. A relationship is developed over a period of time and usually does not happen instantly. Computer Related Habits From Small Business Owner - Be Prepared, Avoid Despair Aside from the fear of losing a spreadsheet or research project prepared for a client, what prompted me to write this article was the realization that it takes nothing short of persistent follow up to stay ahead of computer threats which could ruin my business. I also accepted the fact that keeping my computer free of viruses and spam is paramount to ensuring my computer is not going to harm others. Window Cleaning Business Start Up Should you buy a business opportunity or Franchise if you want to get into the window cleaning business? Or just start your own and work hard; grow the business into a full-time profession and expand from there? Let us talk briefly about window cleaning franchises is in general.One could argue without too much difficulty that buying a window cleaning franchise is simply a waste of money, after all you could simply go down to be 99 cents store and by a bucket 3 towels and a squeegee and hey, you are in business right? Well one could argue that, since to really be in business, you probably need to get a business license, insurance, buy some business cards and make a few flyers. The More you GIVE the More you GET Why give freebies?We have all seen freebies at trade shows and we have all probably seen the person that goes from booth to booth collecting as much of it as possible. There is always someone that only goes to get the free stuff, but then again there are also people that go there to learn about new products or services. Keep TRACK of your Business Relationships and Gain Profits How do you know when an alliance needs to be monitored and tracked?More often than not, an alliance needs to be monitored and tracked. If you ignore your alliance partner at all, you will be losing ground and your business relationship will not be what you expect. To Buy A Fat Pig What does buying a fat pig have to do with your business? Stick with me and all will be revealed.Does your business have a tactical and a strategic way to go to market? Let's go down to Mr.
|
| Home | Site Map | Privacy Statement | More Articles |
| © 2006 |