| Q: I am thinking about starting my own business, | | | | life savings when your business tanks.The final |
| but statistics show that most new businesses fail. | | | | contributing factor to the death of sixty-three |
| Why do you think most businesses fail?A: This is | | | | percent of the businesses who died from bad |
| the column that probably gets me kicked out of | | | | management was that the owners had no |
| the entrepreneurial chapter of the Priory of Scion. | | | | relevant or applicable business experience. Just |
| I look silly in those long robes anyway, so here | | | | because you eat at McDonald's does not mean |
| goes.A thousand apologies to my entrepreneurial | | | | you're qualified to manage one.Bad financial |
| brothers and sisters, but. I think the more | | | | planning was the second reason why most |
| important question is: do businesses fail or does | | | | businesses fail. According to the study, eighty-two |
| the entrepreneur in charge of them fail? I have to | | | | percent of the business failures studied reported |
| be honest and tell you that I think most business | | | | poor cash flow management as a contributing |
| failures must be laid at the feet of the person in | | | | factor to the death of the business.Seventy-nine |
| charge.Sure, there may be contributing factors to | | | | percent of the businesses were inadequately |
| the demise of a business, such as a huge chain | | | | funded to begin with and seventy-seven percent |
| store moving in next door, a down economy, the | | | | miscalculated the cost of doing business. In other |
| lack of qualified employees, new government | | | | words, they failed to take into account all of the |
| regulations, the failure of a strategic partner, etc., | | | | costs involved when setting the price for their |
| but any entrepreneur worth his salt should see | | | | products.Bad marketing was a contributing factor |
| such things coming and make adjustments to | | | | in the death of sixty-four percent of the |
| weather the storm.And the truth is sometimes | | | | businesses surveyed. Many of these misguided |
| the storm can't be weathered and you have to | | | | entrepreneurs either minimized the importance of |
| abandon ship. Is that a business failure or an | | | | marketing and promotion or ignored it totally.A |
| entrepreneurial failure? I think the coin flips both | | | | vital part of marketing is knowing who your |
| ways.Starting a business is never easy and the | | | | competition is and always knowing what they are |
| fact is approximately half of all small businesses | | | | up to. The entrepreneur who ignores his |
| fail within the first four years, with a large | | | | competition is a fool (gee, was that too harsh?) |
| percentage of those failures occurring in year | | | | and is always destined to fail, as proven by the |
| one.There are many reasons why businesses fail, | | | | fifty-five percent of the dead businesses in the |
| but according to a 2003 survey by U.S. Bank, the | | | | survey who either didn't even know who their |
| majority of business failures can be attributed to | | | | competition was or simply chose to ignore the |
| three reasons: bad management, bad financial | | | | competition altogether.Here's a nice hole in the |
| planning, and bad marketing.The survey showed | | | | sand for you, sir. Please insert your head...Another |
| that seventy-eight percent of the business failures | | | | mistake made by forty-seven percent of the |
| examined were due in part to the lack of a | | | | deceased businesses was that they relied on just |
| well-developed business plan and a business owner | | | | one or two customers for the bulk of revenues. |
| who had no business being in the business he was | | | | This is a common mistake made by many |
| in.In other words, the business owner did not | | | | business owners who devote all their energy to |
| have the adequate knowledge or a thorough | | | | one huge client. What they don't seem to |
| understanding of the business he had chosen to | | | | understand is that if that one customer goes |
| start. This is why software entrepreneurs like me | | | | away, so does most of their revenue.Moral to the |
| don't start shoe stores. I have feet, I wear | | | | story: before diving in you should know the |
| shoes, but that's not enough to qualify me to go | | | | industry, know the market, and know the |
| into the shoe business.Seventy-three percent of | | | | competition. You should also leave your ego at |
| the businesses surveyed were also managed by | | | | home, ask for help when you need it, be realistic |
| owners with rose colored calculators. These | | | | with the finances, and go out of your way to tell |
| optimistic entrepreneurs over-estimated revenue | | | | every person on the planet about your |
| and under-estimated cost.Seventy percent of the | | | | product.Will that guarantee the success of your |
| failed businesses were led by entrepreneurs who | | | | business?Not at all, but it sure can't hurt.Here's to |
| were in denial regarding their own competence, or | | | | your success.Tim Knox |
| more to the point, their own incompetence. These | | | | Entrepreneur, Author, Speaker |
| business owners either didn't recognize (or more | | | | Tim is a nationally-known small business expert |
| likely chose to ignore) their own entrepreneurial | | | | who writes and |
| shortcomings. These entrepreneurs also did not | | | | speaks |
| seek assistance from others who might have | | | | frequently on the topic. |
| made up for their inadequacies. It's hard to ask | | | | For more information or to contact Tim please |
| for help when you are supposed to be the one | | | | visit one of his sites |
| with all the answers. It's harder still to lose your | | | | below. |