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5 reason why most small businesses fail within their first year.

Guest post by: Colin Pritchard

Article Overview: Starting a business is risky, and the truth is most fail within their first year. Business failure is not only common with new businesses but also with businesses that have been around for some time regardless of how successful.

5 reason why most small businesses fail within their first year.

5 reason why most small businesses fail within their first year.

Starting a business is risky, and the truth is most fail within their first year. Business failure is not only common with new businesses but also with businesses that have been around for some time regardless of how successful. Reasons most small business fail are:

1. Lack of vision

The main reason people start their own small business in most cases is to make lots of money as fast as they can, if you have the same mentality you might just be setting your self up to fail. You need to start your business for the right reasons, this way you will have a better chance for success. To have a better chance of success you need to fore mostly believe in your self and enjoy what your doing this will ensure that you drive and determination needed to succeed. Also be patient, success wont happen over night.

2. Poor Time Management

Time management is the number one sources of stress for business owners. A lot of business fail because of there poor time management, they involve a significant amount on administrational task or simply don't a level of discipline keep there mind on the job, therefore it is critical that your behavior is in line with the business goals and strategy. This will ensure you are leading by example and will result in your behavior being reflected in the behavior of other team members.

3. Lack Of Planning

It is fundamental important for all business to have a business plan. Most businesses fail because of shortcomings doing a business planning. Care must be taken to regularly review, plan and control all activities a business operations. This includes setting goals, analysising your cash flow and resolving potential problems.

4. Insufficient Capital

Small business owners underestimate how much money is needed to run their business and they are forced to shut shop before they even had chance reach full potential. They also may have an unrealistic expectation of incoming revenues as well as not allowing enough capital to put into marketing there business.

5. Lack Of Training & Support

Most people fail in business because they make avoidable mistakes!. Even the most passionate business owner can fail if he doesn't have the right training and support to help there business grow. When you're not experienced at marketing, sales, systems, accounting you will need to get some training. Successful business owners surround themselves with experts who have the answers to all there questions. This provides the with with sound knowledge to make informed decisions.

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Re: Business Failure Rate – What is the Real Business Failure Ra - [quote="ZekeLL":x66k5x4x]Ever wondered what the business failure rate is? Between 75% and 90% of all new businesses fail within the first 10 years. If we also take most dotcom startups into consideration, 9 out of 10 new businesses won’t make it to their third year. The actual figures vary according to the source, but it looks like the overwhelming majority of startups end up failing.[/quote:x66k5x4x] Hi ZekeLL, Nice article! So of the 1 out of 10 new businesses that make it to their third year... are they actually successful and if so, how would you define "successful"?
What Are Your 2010 Income Goals? - I failed woefully on my income goals last year, I am not going to fail this year and I am so determined to work hard this year to reach my goal. My goal this year is to make $200.000. Who would like to share their 2010 income goals in this thread?
What causes franchises to fail? - I remember hearing that most new businesses fail in the first year...usually due to money issues. (I've been hearing that for many years, I suppose it's common sense that that would be the case.) I suppose that's the same for franchises? Once you buy a franchise, it probably takes about 5 years before it becomes profitable...if you don't have the cash to keep running for all that time...you go under.
Re: What Businesses to Bail Out? - A year after the government bailed out the big banks , the big automakers and one very big insurance company , the Obama administration seems to have finally gotten around to helping small business. In his weekly address on Saturday , the president shined the spotlight on small business owners and their struggle to get the credit they need to help get their businesses back on their feet. “These are the very taxpayers who stood by America’s banks in a crisis,” Obama said, “and now it’s time for our banks to stand by creditworthy small businesses and make the loans they need to open their doors, grow their operations and create new jobs.” Unfortunately , that’s easier said than done. It was one thing for the government to buy up stacks of bad debt and pump billions of dollars of liquidity into the financial system. It’s quite another to persuade a bank to lend money to a small business that, even in good times, may have a tough time making a go of it. That’s why it’s going to take more than browbeating banks and super-sizing SBA loans to get America’s small businesses off the respirator and out of the emergency room. It’s going to take revenue–sales generated by customers armed with paychecks, credit cards and home-equity credit lines who feel confident enough to start buying again. But with gun-shy banks and credit-card companies cutting consumer credit to the bone, small businesses are going to have a tough time making sales to customers who have to dig into their wallets and come up with cash. And with double-digit unemployment predicted to continue for many years to come, paychecks will also be in short supply.............
Why Franchises Fail - Another reason franchises can fail is due to lack of effort on the franchisees part. If the franchisee does not give it their 110% and purely imitates rather than innovates they will increase their chance of failure.


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