10 REASONS WHY BUSINESSES FAIL 1. UNDER-CAPITALIZATION Lack of money is often the leading cause of small-business failures. Many small- business owners underestimate how much money they're going to need. Not just to get the business up and running, but also to sustain it as it struggles to gain a commercial foothold. Staring out undercapitalized can start a downward spiral from which you may never catch up." 2. BAD CASH FLOW Bad cash flow is just a troublesome as inadequate capital. As businesses move past the embryonic stage they often collapse when incoming cash doesn't offset at least expenses and other costs. Keep a careful ey on your "burn rate". When it comes down to it, cash is what really counts." 3. INADEQUATE PLANNING This is the main reason why problems like under capitalization and bad cash flow happen in the first place. It's critical that you map out as comprehensive a business plan as possible, covering financial issues, marketing, growth and an array of other elements. Granted, it can be time consuming, as a well-prepared plan can take weeks or months to complete. Planning can reveal to you that your idea may not work. If you don't plan and still go ahead, you may end up with heartache and thousands of dollars down the drain. 4. A COMPETITIVE EDGE Genuinely unique ideas are hard come-by, but it's critical that your business gain a toehold in some sort of singular niche that you can exploit. Be it a slightly different product or customer support that goes beyond your competitors; earmark that one element that sets your business apart. Too many small businesses provide 'me too' operations and fail to make sure they have something unique or different. 5. MUSHY MARKETING You know how special you are, but what about your prospective customers? It's essential to develop a marketing strategy not merely to identify who might buy from you, but why. Make certain your marketing strategy sets you apart so a customer can clearly see why she'd rather go to you than a competitor. 6. INADEQUATE FLEXIBILITY From stacks of cash to battalions of seasoned employees, every small-business owner knows the advantages a larger competitor brings to the game. One thing larger companies can't necessarily do is “turn on a dime”. This is something small businesses can exploit. Always remember to remain flexible. If a product isn't quite right or a marketing campaign isn't really flying, don't be afraid to tinker. Making those sorts of in- course adjustments is much more unwieldy for the big guys. 7. IGNORING THE NEXT STEP It may be challenging to find customers but rest assured, it is more important to keep those customers coming back. Make sure you and your people emphasize complete customer support. This means “going the extra mile” for your customer by doing things you don't really have to or offering thoughtful, useful advice that goes beyond the ordinary. 8. FORGETTING THERE'S NO RED 'S' ON YOUR CHEST Entrepreneurs are a smart, resourceful bunch, but running a small business carries its share of pitfalls. Don't try to be all things to your business. If you cringe at the thought of maintaining complete books, don't hesitate to hook up with a good bookkeeper. When a legal issue crops up, don't rely on your ability to evaluate the legal ramification. Establish a long-term relationship with an attorney; preferably one with small-business acumen. 9. GREAT BOSS, MEDIOCRE STAFF You’ve worked very hard to get to the point of hiring employees to assist you or run your day-to-day operations. Inexperienced and unmotivated employees can often bring down many solid businesses. Make certain your employees are well trained, fairly compensated and somehow share in your knowledge and enthusiasm. 10. UNCONTROLLED GROWTH Ironic as it seems, a small business that grows too quickly often finds itself in serious trouble. If production fails to keep pace with demand or necessary expansion coincides with insufficient cash, the growth you dreamed about in the beginning can threaten your business' very existence. Avoid this pitfall by planning for growth in your original business plan. Track your company’s growth and make certain that it never gets dangerously out of hand.