Why do businesses fail?

[CIsaac]

Lack of flexibility and being open to asking for help. An idea or concept never works the way we think it is-so can we adapt? It's about finding solutions, can we find out what's not working and find solutions to fix the leak? Will the owner be willing or able to change a business model? If not, then failure looms.

[The Stealthy One]

Not true at all. Not at all.

Please elaborate?

[bananaman]

I think lack of funds is a big reason why biz fails.

And then lack of sales.

[Gene]

I think I agree with this statement. While it is true that on occasion circumstances do occur that are beyond management's control, a lot of the time it is a management problem.

Businesses NEVER fail, management fails.

[Creativegd]

Businesses NEVER fail, management fails.

I totally agree! Thats why newbies like me need as much advice and mentors as we can get. The 4 Hour Work Week book says setting up a good system is crucial... otherwise, you haven't got a prayer.

[TrafficVault]

Big fan of 4 hour Workweek, as well.

Also, check out Art of the Start. There's a section about having laser focus. Essentially, it says- dont be all things to all people.

[WButler]

They fail because the timing isn;t right for what they're offering

[WealthNet]

Akula, you sound like you know what you're talking about. Good insights. I enjoyed reading your perspectives. I have failed plenty. And luck, or lack thereof, was a factor. So were many other issues related to my thinking.

[jonathanfigaro]

Business fail because people don't think for themselves. they let other people think for then. They also, Never think of a good as result consciously , but instead a bad one. They break mentally to easily!

[Ruman]

Undercapitalization and no planning for how they will be profitable.

For example, for your site jobs4trade.com, what capital do you have ready to invest in advertising for this business? Secondly, how to you plan on profiting from this site? After those have been decided, have you determined the amount of traffic that must come to the site in order to not only pay back your investment, but repay you for your time invested?

[shalabh1977]

Unfortunately, many of these businesses could have succeeded if they had only known how to avoid the top six pitfalls that commonly plague struggling companies.

1. Lack of planning

Successful small businesses don't just happen. They are the result of intentional and well-executed business plans. Many entrepreneurs are so eager to get started that they neglect business planning and jump in headfirst with little more than a dream and an idea. That might cut it in some arenas, but not in small business. If you have already started your business and don't have a business plan, your first priority should be to get one. Fast!

2. Inadequate funding

Another common reason for small business failure is a lack of adequate funding, especially during the critical start-up period. Inadequate funding severely limits your capacity and threatens your ability to grow beyond the initial stage of life. If you have done your homework properly, you should know how much money it will take to launch your business
. Resist the urge to start until you have obtained all of the funding you know you need to do it right.

3. Bad marketing

It's possible to create a business that sells the best product at the best price and still fail because no one knows it exists. Getting the word out about your product is critical if your business is going to have any chance of becoming the thriving venture you think it can be. If you don't know anything about marketing, get help from someone who does. If all else fails, cruise the local bookstore and pick up a few resources that will help you get started.

4. Unreliable suppliers

You can't sell what you don't have. Your ability to maintain proper levels of inventory is directly proportional to the quality of your relationships with reliable suppliers. Developing effective supply channels can take a little time, but if you are having problems with your current supplier don't cross fingers and hope things will get better. Take action! Seek out new supplier relationships and make the switch as quickly as possible.

5. Staffing imbalances

Labor is the biggest expense for most small businesses. Therefore, it only makes sense that it's worth your time to make sure that your company employs the right amount of people. Too many employees and you'll be forced to carry around dead weight. Too few employees and performance will suffer. Striking the perfect balance isn't easy, but the rewards are well worth the effort.

6. Ineffective sales performance

Sales are a key element in the success of any businesses. Poor sales, on the other hand, are an indication that your business might be in jeopardy. Maintain a close eye on sales patterns and trends, and hire the best sales staff you can afford to keep the money rolling in and your company rolling on to the next level.

paramnetwork.com

[belablasko]

1. Lack of planning

Successful small businesses don't just happen. They are the result of intentional and well-executed business plans. Many entrepreneurs are so eager to get started that they neglect business planning and jump in headfirst with little more than a dream and an idea. That might cut it in some arenas, but not in small business. If you have already started your business and don't have a business plan, your first priority should be to get one. Fast!

2. Inadequate funding

Another common reason for small business failure is a lack of adequate funding, especially during the critical start-up period. Inadequate funding severely limits your capacity and threatens your ability to grow beyond the initial stage of life. If you have done your homework properly, you should know how much money it will take to launch your business. Resist the urge to start until you have obtained all of the funding you know you need to do it right.

3. Bad marketing

It's possible to create a business that sells the best product at the best price and still fail because no one knows it exists. Getting the word out about your product is critical if your business is going to have any chance of becoming the thriving venture you think it can be. If you don't know anything about marketing, get help from someone who does. If all else fails, cruise the local bookstore and pick up a few resources that will help you get started.

4. Unreliable suppliers

You can't sell what you don't have. Your ability to maintain proper levels of inventory is directly proportional to the quality of your relationships with reliable suppliers. Developing effective supply channels can take a little time, but if you are having problems with your current supplier don't cross fingers and hope things will get better. Take action! Seek out new supplier relationships and make the switch as quickly as possible.

5. Staffing imbalances

Labor is the biggest expense for most small businesses. Therefore, it only makes sense that it's worth your time to make sure that your company employs the right amount of people. Too many employees and you'll be forced to carry around dead weight. Too few employees and performance will suffer. Striking the perfect balance isn't easy, but the rewards are well worth the effort.

6. Ineffective sales performance

Sales are a key element in the success of any businesses. Poor sales, on the other hand, are an indication that your business might be in jeopardy. Maintain a close eye on sales patterns and trends, and hire the best sales staff you can afford to keep the money rolling in and your company rolling on to the next level.

[Hovey]

Rapid growth with low cash flow

[VinnieTheVisionary]

when entrepreneurs give up at the first sign of failure...

[gambit]

If you don't have a Market, you don't have a business