10 Top Reasons Small Businesses Fail and Quick Fixes

I did some online research over the past couple of hours on the Top 10 Reasons Small Businesses Fail.

The first I came up with was information from the Small Business Administration, an American federal government agency with some 2,000 permanent full time staff and a head honcho (called an Administrator) sworn into the post by the President no less… so I guess the USA takes small businesses seriously ;-)…

Anyway, back to the main plot: The SBA says (apparently in no particular order):

  • Over expansion
  • Poor capital structure
  • Overspending
  • Lack of reserve funds
  • Bad business location
  • Poor customer service and accounting protocols
  • An inadequate business plan
  • Failure to change with the times
  • Ineffective marketing and self promotion
  • Underestimating the competition

Now it might just be my limited powers of research (though I’m normally pretty good) but the only answers I could find regarding UK businesses was on a UK franchise site. Nothing wrong with that but it doesn’t have the same kind of kudos as a government agency.

Never mind – this time the reasons are in numerical order – presumably in importance of their contribution to failure. Let’s see what they are:

  1. The manager is incompetent
  2. Finances are not in place
  3. The Owner gives up too quickly
  4. Insufficient advertising
  5. Lack of branding
  6. Inability to close the sale
  7. Poor location
  8. Bad treatment of suppliers and (heaven forbid) customers
  9. Lady Luck
  10. Overestimation of demand and lack of USPs

So where are the similarities and how might you be able to get any quick fixes?

Remember that it’s often not what you know but who you know (let’s face it, if you knew that what you were doing was poor business and likely to come back and bite you in the you-know-where you’d hardly have done it, would you?). And if you’re genuine and ask people nicely they’re usually flattered and happy to help where they can.

  • Bad/ poor business and financial planning

Who do you know who could help you out here? How about Successful people you know who’ve been through what you’re currently going through recently enough to have what they might be able to impart still hold water in these economic times?

  • Poor location

I admit I haven’t had a need to know about business premises leases so again I’d say: Ask around and find a business person who does. It may be that you’re stuck where you are, in which case concentrate instead on other ways to combat it…

  • Poor Differentiation, Communication and Support of Brand Value in relation to Market Need and Willingness to Pay

If you don’t know somebody who has demonstrably got this right for their own business and can help you do the same for yours… I’d be happy to help :-)!

Linda Mattacks - Small Business Training

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