Why Small Businesses Fail and How To Avoid This Fate
Starting a business is no easy venture, as many of them fail within the first five years according to the Small Business Administration (SBA). The SBA identified several reasons why many small businesses are likely to fail within their first five years in business. The reasons why many small businesses fail can be attributed to the following; starting a business for the wrong reason, poor management, insufficient capital, wrong location, lack of planning, over-expansion and not having a website. These are the reasons that the Small Business Administration found to be the likely cause of many small business failures.In order to avoid the same fate as many small businesses, they suggested some ideas that should be taken into consideration. If starting a business was a way to have more time to yourself, SBA suggest you think again. One will likely have to run many aspects of the business instead of running the business. Poor management was another reason for business failures. Small Business Administration suggest that a small business owner should know how to manage their times, their employees and of course their business. Some small entrepreneurs also think they will cash in big time within the first year or two, but should be advised they likely won’t establish themselves on average for five years before seeing the cash flow. Small business owners also need to take into consideration the location of their business. If they choose a poor location, the business will almost certainly fail. Small business owners also need to take the time to plan their business over the course of several years. Where do you want the company to be in a year, two years, five years? Overexpansion is another downfall that can lead to business failures. If a business is experiencing significant growth, they must be ready for this expansion. If they don’t plan for future expansion to occur, whether or not it happens, a small business will surely fall flat. Small businesses are also likely to not have a website or a poor website at best. In order to gain more attraction from potential customers and clientele, the best thing a small business owner can do is to spend some money on a visual appealing but usable website.
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