Home
>
Small Business
>
How to Avoid the Most Common Reasons for Small Business Failure

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.

apartment cleaning near Wilmette ..

In The News:

House Bill 469 would prevent AI systems from owning property, serving as executives, or gaining legal personhood in Ohio under Representative Thaddeus Claggett's proposal.

Public voter records expose retirees' personal details to election scammers who create targeted cons using names, addresses, and voting history data.

Instead of fearing what comes next with artificial intelligence, think outside the box. Here are high-earning AI jobs that don't require a computer science degree.

OpenAI CEO Sam Altman says polite words like "please" and "thank you" cost millions annually, while direct prompts may improve ChatGPT accuracy by several points.

Chattee Chat and GiMe Chat exposed intimate conversations and photos, revealing users spent up to $18,000 on AI companions before the breach.

New Instagram parental controls allow families to manage teen screen time and content limits through the Family Center with stricter safety settings.

Third-party security breach at Discord exposes sensitive user information including government IDs, highlighting cybersecurity risks from external service providers.

Survey of 1,000 students shows teens using AI for personal relationships while two-thirds of parents remain unaware of their children's AI usage.

Cybersecurity experts warn about a ShadowLeak vulnerability that weaponized ChatGPT's Deep Research agent to steal personal data from Gmail accounts through hidden commands.

Tesla's Full Self-Driving system faces federal investigation following 58 reports of crashes, with six vehicles running red lights before colliding with other cars.

The Fox News AI Newsletter brings you the latest developments on artificial intelligence, with news on OpenAI moving to soon allow erotica for adult users.

Eric Schmidt alerts that hackers can reverse-engineer AI models to bypass safety measures, citing examples like the jailbroken ChatGPT variant called DAN.

Cybercriminals exploit Microsoft Teams through impersonation, malicious links and fake profiles to gather intel and deliver ransomware to personal and work devices.

Google, Dior, Allianz and dozens of other companies lost sensitive customer data in Salesforce-related breaches affecting millions of records across multiple sectors.

Apple launches iOS 26 with new Preview app that combines document editing, PDF annotation and scanning features into one streamlined iPhone experience.

New AI road monitoring system uses sensor-embedded fabric to predict infrastructure problems, potentially reducing maintenance costs and traffic disruptions for cities.

Holiday charity scams target retirees through lookalike organization names, untraceable payment requests, and data broker information to steal donations.

The Federal Trade Commission says criminals are posing as IRS agents, law enforcement officers or other officials, often over the phone or online, to steal thousands of dollars at a time.

AI phishing scams now use voice cloning and deepfake technology to trick victims, but Kurt "CyberGuy" Knutsson reveals warning signs to watch for.

Inversion Space unveils Arc, a reusable reentry vehicle that can deliver up to 500 pounds of cargo from orbit to anywhere on Earth in under an hour.

Red flags like processing fees, urgent countdowns and requests for full Social Security numbers expose fraudulent settlement sites targeting consumers.

Comprehensive analysis of Google Maps, Waze and Apple Maps examines usability, routing accuracy, data handling and features across the top navigation platforms.

Expert analysis reveals whether wired Ethernet or wireless Wi-Fi connections are safer for home internet use, plus practical steps to secure your network from attackers.

Australian construction robot Charlotte uses sand, crushed brick and recycled glass to 3D print fireproof, floodproof homes with reduced carbon footprint.

Cybercriminals are using fake invitation emails to trick recipients into downloading malware and stealing personal information and data.