Posted by: Kelle Marsalis, Manager, Member Services
Why do small businesses fail?
One blogger says, “Don’t ask the owner, ask the customers.”
A recent blog on the New York Times’ “Your’re the Boss” page offered ten reasons small businesses fail. The writer’s first major statement seems like common sense – “don’t ask the entrepreneur. If they knew what they were doing wrong, they would have stopped. Ask the customers… or should I say the ex-customers.”
Below is the rundown of the posted reasons. What is the number one reason you think small businesses fail?
1. The math doesn’t work. There may be more supply coming from this company or other large retailers than the demand can handle.
2. Owners who cannot get out of their own way. Great idea… not great at business management.
3. Out-of-control growth. Sometimes less is more.
4. Poor accounting. Single entrepreneur? Well, according to this blog, unless your business is accounting, chances are you’re not qualified for this part of the job.
5. Lack of a cash cushion. Lawsuits, loss of critical employees, new competition: all reasons a cushion can keep you on track.
6. Operational mediocrity. Each owner thinks their operation is above average. But they can’t all be stellar, or that would be the average. How do businesses have an edge to create repeat customers?
7. Operational inefficiencies. The ability to cut costs without your product suffering is major asset right now. Be competitive, but also be willing to negotiate.
8. Dysfunctional management. If the management has checked out or can’t keep their personal life at bay, disaster is looming.
9. The lack of a succession plan. Many businesses don’t make it to the next generation because that generation may not be ready.
10. A declining market. Many industries are becoming obsolete. Anyone used a Walkman lately?
CLICK HERE to read the full blog. Did the writer miss anything? Post below.