Most Common Reasons Businesses Fail, part 1 of 2

Whether you have a new or existing business the last thing you probably want to think about is potential failure. However, by being proactive and becoming aware of the most common reasons you are more likely to avoid these pitfalls.

#1 Bad management. This is the number one reason businesses fail. Whether you intend to manage your own business or hire someone, it's essential that the manager have the proper skills. Unless people realize where managers are unskilled and provide a remedy your company may be headed for disaster.

For example, is your manager neglectful? They should regularly evaluate procedures for efficiency. They should organize, plan and control activities, and also do market research.

Does your manager lack expertise? They need to be familiar with financial aspects of your business as well as purchasing, selling, hiring, delegation, and so on. Your manager should be a strategic thinker who can turn a vision into reality.

Many business owners invest in management training. Not only can it save money in the long run, but it may save the business.

#2 Insufficient capital. All too often people underestimate the amount of capital they need to start, operate or expand their business. It’s important to utilize resources and experts to gather necessary information for calculating costs.

A good rule of thumb is to always give yourself a cushion by factoring in an additional percentage as well as setting aside emergency funds.

#3 Poor accounting practices. Do you regularly review your financials? You have to know what your financial weaknesses are so that you can make adjustments. You need to monitor your finances from the very beginning so that if and when you do seek capital, your credit is in good shape.

Also the bookkeeper may be performing their job well, but they don't always watch if the business is meeting financial goals. That's typically the job of the CFO, but until there is one that responsibility falls on the owner.

#4 Lack of planning. Any project requires careful, methodical and strategic planning and the same goes for your business. Their business may be the biggest financial risk of their life, but some business owners spend more time planning a vacation.

It's not just important to have a Business Plan- it is critical! Why? Because it is your road map to your visions, goals, workforce needs, potential problems, etc. You need to know where you want to go with your business before you can communicate that to your managers. If you don't know the route you want to take, how can you expect them to stay on track?

#5 Location. There are several things to consider when it comes to the location of your business. First of all, will you be too far from your customers? That downtown location might seem expensive at first, but if you're establishing your business in a more remote area because it's cheaper, people may not get to you.

What about access to your business? If your potential customers have a difficult time accessing your business, they may just decide to go elsewhere.

What is the condition of the building? You definitely don't want to operate your business in a building that is dilapidated. Not only can it detract new business, but there may be risks of injuries that can invite lawsuits.

Also is your business right for the community? You should know the demographic information beforehand to assure that you have a sufficient potential customer base. If your target market is young adults, for example, you certainly wouldn't want to open it in a retirement community.

Other recommended posts
Ten Tips for Business Success
The Business Plan: Not Just a Blueprint
Making Expense Management A Priorty

Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.

Utilizing Video Production from Start to Finish, by Bourns Productions

Video Production can be used in all phases of your business. Below are some key ways that Bourns Productions can help your business from start to finish.

Starting a Business

Marketing: A key piece to gaining new business and growing your company. Bourns Productions offers a multitude of video packages and consultations to help market your company and/or it’s products.

We will work closely with you to develop video(s) that serve your needs. This can range from TV and Web Commercials to ongoing online content to Product Promotional Videos, Online Content for your website and Social Media Marketing.

Training: We can help make employee training more streamlined and affordable by producing training videos for new employees to watch, teaching them the guidelines, expectations and even daily responsibilities of their new position. This saves you valuable time training each employee from scratch allowing you to focus on other parts of your business or teach them more advanced techniques.

Expanding Your Business

Marketing: See Above

Public Relations: As your business grows and begins to be in the public’s eye, public relations becomes a key component to holding a high reputation but can also double as positive alternative marketing.

We can produce event coverage videos that you may sponsor or put on, or do human relation stories on positive charitable donations you have made to community, or even client testimonial videos. There are many possibilities in this arena.

Time to Refresh or Revive

Marketing: See Above

Employee Relations: Many larger companies manage their large employee base with the use of an employee “TV” Network. It’s a great communication tool to keep your employees up to speed on the latest developments happening across the company, we also often include recorded video messages from the CEO or key company leaders.

Winding Down

Public Relations: We can help ease the management or retirement transition with a powerful video message clearly explaining the history and goal of the company moving forward.

For portfolio examples and contact information visit http://bournsproductions.com/.


Find out more about the Business Achievement Center at our web site http://www.BusinessAchievementCenter.com. Our group of Strategic Partners are here to help businesses from start-up to expansion with our experience and expertise.