Reasons for Small Business Failure

Small businesses have been considered the mainstay in countries around the world. In many European countries for example, the small business has been considered crucial to the success and flourishment of the country in general. Most individuals start upon a small business venture in the hopes of realizing ownership, independent profits and personal success. Small businesses can prove extremely successful when planned properly. Studies suggest that several small businesses, however, close or fail within the first few years of operation. This failure suggests that a majority of small business owners may not have as yet realized the crucial success factors necessary for successful implementation of a small business.

90% of all small business failures can be traced to, poor management, lack of planning and under capitalization that is why starting and managing a business takes motivation, desire and talent. It also takes research and planning. success in small business starts with decisive and correct opening moves. Don't depend on customer loyalty, customers go to where the best prices are, keep tabs on competitors and service are. Make time each week or month to develop new methods, services or products. another key component is customer service, if you don't serv them they'll go somewhere else.

Companies should have only enough workers to perform essential operational functions. Hire employees who are well trained and able to pro-vide results. Moreover, employees should be happy, keep them motivated. Remember that just being good at one thing doesn't mean it's enough for the business to be successful. The owner should be adept at several things such as hiring, accounting, marketing, public relations, etc. And, although initia...

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...de your comfort zone, it might be better to find something that more closely mirrors your skills. Ten years of retail experience offers much more chance of success than an opportunity based on telemarketing skills.

7. View the Event Horizon: In the near future, what is the likelihood your business can be replaced by technology, impended by government regulations, or made obsolete by social changes? Perform a quick SWOT analysis to see how your small business opportunity will survive. It is not be realistic to start a music store during the peak of digital piracy.

8. Use the People Factor: Many business opportunities will require a motivated and skilled work force. Make sure you're able to fulfill this equation or it will be the one critical success factor which can make or break you. Remember, good people are hard to find. Ponder how you will gain and retain them. "