Why Businesses Fail
Do any of the warning signs below apply to your business?
- Lack of planning – no business plan, or failure to use the plan they have.
- Management lacks crucial business skills
- Lack of clearly written, achievable goals for short-term and long-term
- Unclear what customers want, need or will buy (or unrealistic expectations)
- Low customer satisfaction, poor quality product or service, lack of repeat business
- Underestimating, or not understanding, the competition
- Unwilling or unable to change, slow to react to need for change
- Lack of consistent, written procedures, inefficient or inadequate systems
- Insufficient funding, inadequate financial plan, negative cash flow, no budget
- Unknown break-even point for the products & services being sold, excessive overhead expenses
- Not understanding the costs of hiring & training employees, high turnover rates
- Failure to comply with government requirements for the business, government red tape, failure to withhold and/or pay employment taxes, inadequate employment records, etc.
- Failure to adapt to market changes
- Poor controls over departments/functions
- Failure to maintain adequate records and/or to back-up computer files regularly
- Over-diversification, too many products or services offered
- Lack of diversification, overly dependent on one customer, product or service.
- Failure to plan in advance, in writing for natural disasters or other emergencies
- Co-mingling of business with personal finances
