Why Businesses Fail? – Avoiding common statistics

From our “Ask an Expert” blog – John L. asks –
“You mentioned in your recent article (Why Marketing alone can’t save your business) that a business should focus more attention on fixing common reasons businesses fail before addressing Marketing. What are those issues you are referring to?”

Thank you for the question and reading our blog.  In that article we made the point of when people are searching for a Consultant, the current Google trend is to search for one that will get more business in the door opposed to how to fix a failing business.  My interviews with many Small business leaders shows that many owners may feel Top line revenue is the only thing needed to fix an ailing business, when in fact there is often much more to it than that.  Our concern is that people don’t always know what signs to look for or how to judge the strength of their businesses ability to generate revenue other than looking at a Marketing fix.

So what are the top reasons a business fails?  Our company has researched many different sources to find 2 common reasons.  I have presented this concept to MANY Business Bankers, Accounting groups, Accellerators and Chambers, who ALL agree with our approach.

The Top 2 reasons Business FAIL are:

  1.  Lack of Education – Business Acumen & Experience
  2.  Lack of Timely or Appropriate Funding
 Business Acumen is a combination of a variety of skills, experience, decision making and planning ability.  Many people have a specific expertise which may be enough to start a business, but other skills are needed to build a successful business and this creates a skills gap.  Not gaining or hiring for those skills can leave a gap in Business operations, which over time devalues a business.
Appropriate funding refers to funding at different phases of business growth.  Start up funds, seeking capital growth funds or credit line at appropriate times, and managing Revenue capabilities (or cost controls) that maintain budgeted margins.

Some common statistics –

50% of Small Business fail the First year

65% of Small Business fails within 3 years

~80% of Small Business fails with in 5 years

of those


 

80% of Start ups fail due to lack of Management Knowledge and skills

* SBA,D&B,US Census, Inc Magazine


 

92% of Small Business fails due to poor

Management Acumen

                    * Dunn & Bradstreet


Failure is 2X more likely due to Quality of Management than due to External Factors

                                                          *National Bankruptcy Annual Reports


90% of FAILED Business is due to lack of Quality Management.

of these:

48% classified as incompetence

42% classified as inexperienced

                                                                        *IMC (International Management Consultants)

These are pretty sobering statistics and speak to the point my business continually addresses which is;  there are multiple areas to build upon to strengthen and grow a business.  There is a growing need for people capable of Holistically Assessing and Planning.  Where does a business person start when they want to look at their own business you ask?  Start with these common traits we have found that support the 2 Most common reasons listed above.

Reasons a New Business FAILS

  • Lack of understanding the effort needed
  • Inadequate financing
  • Lack of planning
  • Unrealistic expectations of success & salary
  • Inability to commit
  • Unwillingness to take responsibility

A key problem for Start Up Business is that they don’t know what they don’t know.  Seeking the advice of people that can both Mentor & Lead them and their plan development helps significantly .

 

Reasons Existing Business FAILS

  • Poor cash flow management
  • Seek funding too late
  • Absence of Performance Monitoring
  • Lack of target Audience research
  • Poor inventory management
  • Failure to identify your own Strengths Weaknesses (SWOT)
  • Insufficient professional resources

Anyone who has run an Organization (Profit or Non Profit) knows how many hats you have to wear.  There are so many obstacles that come up, you become seasoned in researching and solving your own problems.  The difference between a Pass or FAIL here we have found is often a combination of 3 things.

  1. Over confidence in your own assessment capabilities
  2. Misinformation
  3. Closed mindedness

 

In post mortem interviews with owners or Executive Directors, a common response is “I should have this, or I should have that”.  Retrospection shows the same 3 conclusions listed above.  There are many other complicating issues and each case is unique, but if you are in a position where you need to do something (and quickly) to “turn things around” I suggest looking (in addition to Marketing) at these issues to insure you can make the most of your revenue.

Last thought – If you are just looking to increase your profit line by a few points, improving internal efficiency can add as much to your profit line as adding to your Top line revenue.

To learn more about our unique Assessment and Efficiency Services  ContactUs-Gray-Primary-16

Carpe diem!

 

 

0 thoughts on “Why Businesses Fail? – Avoiding common statistics

  1. Kudos! Excellent information!
    http://canadianpharmacymim.com/
    canadian discount pharmacy canada drug canada drugs online pharmacy [url=http://canadianpharmaciesnnm.com/]canadianpharmacy[/url]
    canadian drug
    pharmacy tech
    buy prescription drugs online
    discount prescription drugs online
    online canadian pharmacies
    best canadian mail order pharmacies

  2. Incredible a lot of superb knowledge!
    http://canadianpharmaciescubarx.com/
    buy cialis online pharmacies canada discount drugs online pharmacy [url=http://canadianpharmacysilo.com/]canadian online pharmacies[/url]
    buy prescription drugs online
    online drugs
    canadian discount pharmacy
    canadian pharmacies that are legit
    price prescription drugs
    legitimate canadian mail order pharmacies

  3. Many thanks, Useful information.
    http://canadianpharmacymim.com/
    canadian drug stores online canadian pharmacies without an rx canadian pharmacies that ship to us [url=http://canadianpharmacysilo.com/]online pharmacies of canada[/url]
    canadian prescriptions
    canadian family pharmacy
    canada pharmacies online pharmacy
    canada pharmacies prescription drugs
    canada pharmacy no prescription
    canadapharmacyonline com

  4. You made the point!
    https://nicktambone.com/
    canada drug prices global pharmacy canada cialis canadian pharmacy [url=http://www.canadianpharmacymsn.com/]canadian pharmacies that ship to us[/url]
    canada pharmacies online
    drug stores near me
    canadian pharmacies online prescriptions
    canadian pharmacy
    prescription drug price comparison
    pharmacy prices

  5. Appreciate it, A good amount of info.
    http://canadianpharmaciescubarx.com/
    online pharmacy reviews canada pharmacy highest rated canadian pharmacies [url=http://canadianpharmacyntx.com/]north west pharmacy canada[/url]
    online pharmacy reviews
    prescription drugs online without
    us pharmacy no prior prescription
    prescription drugs prices
    online drugstore
    online canadian pharcharmy

  6. Thanks! Numerous information!
    https://nicktambone.com/
    legitimate canadian mail order pharmacies canadian pharmacies without an rx canadian drug stores online [url=http://canadianonlinepharmacynnm.com/]canadian pharmacies without an rx[/url]
    canadian mail order pharmacies
    no prescription pharmacies
    trusted overseas pharmacies
    canadian online pharmacies
    board of pharmacy
    top rated online canadian pharmacies

  7. This is nicely said. !
    http://canadianpharmaciesnnm.com/
    the canadian pharmacy canada pharmacy online cheap canadian drugs [url=http://canadianonlinepharmacynnm.com/]north west pharmacy canada[/url]
    buy cialis
    the canadian pharmacy
    canadapharmacyonline com
    canadian pharmacy online
    highest rated canadian pharmacies
    international pharmacy

  8. You said it very well.!
    http://talahicc.com/
    canada pharmacy online canadian pharcharmy no prescription pharmacies [url=http://canadianpharmacysilo.com/]canada pharmaceutical online ordering[/url]
    canadian pharmacies that ship to us
    cheap canadian drugs
    mexican pharmacies online
    canadian pharmacy viagra brand
    legitimate online pharmacies
    discount pharmacy

  9. Truly many of terrific information!
    https://nicktambone.com/
    canadian pharmacy 365 canadian viagra online pharmacy no prescription needed [url=http://talahicc.com/]northwestpharmacy[/url]
    online discount pharmacy
    mexican pharmacies online
    canadian pharma companies
    prescription drugs canada
    canadian pharmacy no prescription needed
    online pharmacy without a prescription

  10. Wonderful stuff. Appreciate it!
    http://www.canadianpharmacymsn.com/
    canadian prescription drugs canadian pharmacies the canadian pharmacy [url=http://canadianpharmaciescubarx.com/]online pharmacies canada[/url]
    canada pharmacies without script
    prescription drugs prices
    canadian prescription drugstore
    us pharmacy no prior prescription
    internet pharmacy
    drug stores near me

  11. Nicely put, Regards!
    http://talahicc.com/
    king pharmacy global pharmacy canada pain meds online without doctor prescription [url=http://canadianpharmacysilo.com/]canadian pharmaceuticals online[/url]
    canadapharmacyonline com
    pharmacy online mexico
    canadapharmacy
    canadian online pharmacies prescription drugs
    the canadian pharmacy
    online pharmacies

  12. You expressed it wonderfully!
    http://canadianonlinepharmacynnm.com/
    prescription cost comparison canadian pharmacies online prescription drugs [url=http://canadianpharmacysilo.com/]canada pharmaceutical online ordering[/url]
    mexican pharmacy online
    best non prescription online pharmacies
    mexican pharmacy online medications
    walgreens pharmacy
    global pharmacy canada
    24 hour pharmacy

  13. With thanks, Wonderful information.
    http://canadianpharmacymim.com/
    canada pharmacies online canadian pharmaceuticals online prescription pricing [url=http://canadianpharmaciesnnm.com/]canada pharmaceuticals online[/url]
    board of pharmacy
    canadian pharmacies online
    pharmacy cost comparison
    northwestpharmacy
    canadian pharmacy no prescription needed
    canadian pharmacy without prescription

  14. Info effectively applied!!
    http://talahicc.com/
    canadian rx online pharmacies of canada prescription drugs without doctor approval [url=http://canadianpharmacysilo.com/]aarp approved canadian online pharmacies[/url]
    ed meds online
    online drugstore
    canada pharmacies online pharmacy
    safe canadian online pharmacies
    buy prescription drugs online
    canadian pharmacy king

  15. Cheers! I enjoy it!
    http://www.canadianpharmacymsn.com/
    prescription price comparison trust pharmacy canada online pharmacies canada [url=http://canadianpharmaciescubarx.com/]canadian pharmacies online[/url]
    mexican pharmacy online
    canada online pharmacies
    canadian viagra
    compare prescription prices
    canada pharmacy online
    buy prescription drugs canada

  16. Cheers! Ample advice!
    http://talahicc.com/
    best non prescription online pharmacies canada pharmacy canadian pharmacies that ship to us [url=http://canadianpharmacymim.com/]northwestpharmacy[/url]
    best online pharmacies no prescription
    legitimate online pharmacies
    medical information online
    canada meds
    meds online
    no 1 canadian pharcharmy online

  17. You actually stated this exceptionally well!
    http://canadianpharmacysilo.com/
    buy prescription drugs online northwestpharmacy cheap canadian drugs [url=http://canadianpharmaciescubarx.com/]aarp approved canadian online pharmacies[/url]
    pharmacy online mexico
    best online pharmacy
    pharmacy without dr prescriptions
    onlinecanadianpharmacy.com
    walgreens pharmacy
    canadian viagra

  18. Thank you, Lots of info!
    http://canadianpharmacysilo.com/
    online pharmacy no prescription needed london drugs canada canadian pharmacies top best [url=http://canadianpharmaciescubarx.com/]canadian pharcharmy[/url]
    pharmacy near me
    best online international pharmacies
    canadian pharmacies online
    overseas pharmacy forum
    mexican pharmacy online medications
    mail order pharmacies

  19. Appreciate it! An abundance of material.
    http://canadianpharmacysilo.com/
    canadian pharmacies online prescriptions northwest pharmacy best online pharmacy [url=https://nicktambone.com/]canadian viagra[/url]
    canadian pharmacy viagra brand
    discount drugs online pharmacy
    overseas pharmacy forum
    pharmacy price compare
    canada pharmacy no prescription
    canadian drug store

  20. Kudos, An abundance of information!
    http://canadianpharmaciescubarx.com/
    web medical information canadian cialis prescription drugs without prior prescription [url=http://talahicc.com/]canadian pharmacy online[/url]
    best canadian mail order pharmacies
    online canadian pharmacies
    canadian pharmacy king
    prescription drugs online without
    best online canadian pharcharmy
    no prescription online pharmacy

  21. Whoa tons of terrific info!
    http://canadianpharmacysilo.com/
    prescription drug cost canada online pharmacies safeway pharmacy [url=http://canadianpharmacysilo.com/]canada online pharmacies[/url]
    online drugstore
    web medical information
    canadian pharmacy no prescription
    buy cialis
    canadian pharmacies shipping to usa
    canadian prescription

  22. With thanks! A good amount of tips.
    http://talahicc.com/
    pharmacies near me canadian pharmacy canadian online pharmacies prescription drugs [url=http://canadianpharmacymim.com/]canada drug[/url]
    online pharmacy no prescription needed
    canadian pharma companies
    canada pharmacies
    canadian mail order pharmacies
    rx pharmacy
    discount pharmacy online

Leave a Reply

Your email address will not be published. Required fields are marked *