Why Businesses Fail

As I was going through some old papers here in my orifice, I ran across a document called "Why Businesses Fail." I knew there was a reason I hung onto it. It was if I ever decided to start a blog and write about business stuff. Yeah, right. Actually I remember hanging on to it because it had a really simple yet profound list of things that contribute to business failure.

Businesses fail because of:

Lack of Planning
Undercapitalization
Poor Management
Lack of Discipline
Lack of Effort
Poor Execution
Lack of Focus

Some fundamental advice - If you are going to start a business seek the council of people that are more experienced than you.

I can't tell you how many business plans I've read that forget something major like estimates for marketing. They have the competitive analysis done, the mission, projections, the costs associated with rent, equipment, furnishings, etc., but they forgot to include dollar figures for marketing and advertising.

This simple oversight immediately puts the potential business owner in an undercapitalized position. How much does it take for a new retail establishment to advertise for the first 2 years of business. It depends on the market of course, but one thing is sure, this is a very critical time to market your new business. You are probably going to spend more in the first 2 years than you typically would over subsequent 2 year periods.

Take a look again at the list above, make sure you have all you ducks in a row, including your marketing dollars.

This has been a public service announcement from The Big Bald Blog!