Business Failures

In: Business and Management

Submitted By rameiche
Words 1000
Pages 4
Business Failures
Why would my business fail? According to the textbook, there are 12 common reasons for the failure of new small businesses. This is not an inclusive, nor industry specific listing.
Leadership Issues 1. Managerial incompetence 2. Lack of strategic planning 3. Lack of relevant experience 4. Inability to make the transition from corporate employee to entrepreneur
Marketing and Sales Issues 1. Ineffective marketing 2. Uncontrolled growth 3. Overreliance on a single customer
Financial Issues 1. Inadequate financing 2. Poor cash management 3. Too much overhead
Systems and Facilities Issues 1. Poor location 2. Poor inventory control
(Bovee & Thill, 2011)
It is essential for any future entrepreneur to strategically plan the opening of a business. Strategically planning will help to ensure that your company has the tools and resources needed to be successful. Taking into consideration the reasons why most new businesses fail within the first year, it is essential to set the foundation for your company. Consider the following as a checklist of some of the factors that should be considered: What is your offering and market demand? (Write a business plan) What will be your pricing? Estimate how long it will take to make your first sale. Determine what your differentiators are. How will you market? Do you require any training? What are your financing options? Where will the business be located? What business structure are you going to adopt? How to obtain a tax ID, registering with tax authorities, applying for permits and licenses, and hiring of employees/training. This is not meant to be an inclusive list but as a guide.
It is equally important to ensure that you do not fall into a “motivational collapse” while pursuing your dream of successful business ownership. Additionally, it is important to…...

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