33 Percent of all new businesses fail within the first six months, according to Dun & Bradstreet and INC. magazine. Fifty percent of new businesses fail within their first two years of operation and 75 Percent fail within the first three years.
Here are the leading reasons of economic failures.
Bonus Tip – Did not seek help.
For you to see success you must seek help from the experts.
1. No Strategic Business Plan
You’ve heard the old saying “If you don’t know where you are going, how will you arrive there? “
Too many business owners begin their business without a plan. They simply “open their doors” for business and then expect to succeed.
Take the time to build a Business Plan, before starting your business.
Your plan will identify what you would like your business to accomplish (where you would like to go), and the strategies that you will utilize (how you will get there).
(For tips on how to how to write a Business Plan, see the article entitled “How to Write an Effective Business Plan” in this section)
2. Under Funded
Many businesses fall short within the first few months, since the owner runs out of money.
When starting any business, you will require money for all of your start-up costs as well as money to sustain the business for the first few months of operation (until cash flow from operations is positive).
Running out of money is a result of poor planning. A properly developed Strategic Business Plan will tell you exactly how much money you require for start up expenditures and also to operate the business until cash flow is positive.
A business owner should develop Income Cash and Claims Flow Statements for the initial two years of operations. That will explain whether or not you have sufficient funds to sustain the business until it is profitable.
3. Lack of Operating Goals and Objectives
Many business owners create a Business Plan to obtain a loan. Once they receive their funding, they put their plan “on the shelf” and do nothing further by using it.
While it is important to have a Business Plan, it is also very important to have particular goals and objectives for the first twelve months of operations.
In your planning process, create goals and goals for your business. Break-down objectives and goals by quarter, in other words, identify all of the things that must definitely be done during the first quarter, the second quarter, the third quarter and the fourth.
Source by Marc Drouinaud