Timeless advice. The source of this posting is acknowledged below.
1. Undercapitalization
Too many SMEs underestimate how much money is needed at start-up and during a potentially lengthy transition as the business attempts to make it to commercial viability. By starting out undercapitalized, a business may never have enough to catch up.
2. Poor Cash Flow
Intermittent or poorly managed cash flow fails to meet recurring and capital expenses. The business develops a “cash flow burn rate that is not met by income.
3. Lousy Planning
Lack of a comprehensive business plan that covers all the bases.
4. No Competitive Edge
Lack of clearly identifiable niche and a failure to identify at least 1 element that sets the business apart from its competitors. Becomes a facsimile of ever other business in that field.
5. Lousy Marketing
Poor and non-unique marketing
6. Delayed Flexibility
The ability to correct on-the-fly is crucial to SME’s success.
7. Incomplete Customer Service
Not just the obvious, but the stuff that goes beyond the ordinary.
8. Lack Of Specialist Help
Refusing to talk to Accountants, Lawyers, Tax Advisors who specialize in SMEs.
9. Disconnect Between Founders And Staff
Failure to share the vision, failure of staff to buy into it, inadequate staff training, lousy staff compensation, self-indulgent executives.
10. Poor Scaleability And Uncontrolled Growth
Many SMEs that succeed too early, fail early too. Further, SMEs may have their highest sales volume just before they fail. Production systems must keep up with demand and there must be sufficient cash for expansion. Expansion must be tracked and controlled.
The above posting is taken from an article entitled “10 Reasons Why Businesses Fail” published in the American Cash Flow Journal, December 2002.
1. Undercapitalization
Too many SMEs underestimate how much money is needed at start-up and during a potentially lengthy transition as the business attempts to make it to commercial viability. By starting out undercapitalized, a business may never have enough to catch up.
2. Poor Cash Flow
Intermittent or poorly managed cash flow fails to meet recurring and capital expenses. The business develops a “cash flow burn rate that is not met by income.
3. Lousy Planning
Lack of a comprehensive business plan that covers all the bases.
4. No Competitive Edge
Lack of clearly identifiable niche and a failure to identify at least 1 element that sets the business apart from its competitors. Becomes a facsimile of ever other business in that field.
5. Lousy Marketing
Poor and non-unique marketing
6. Delayed Flexibility
The ability to correct on-the-fly is crucial to SME’s success.
7. Incomplete Customer Service
Not just the obvious, but the stuff that goes beyond the ordinary.
8. Lack Of Specialist Help
Refusing to talk to Accountants, Lawyers, Tax Advisors who specialize in SMEs.
9. Disconnect Between Founders And Staff
Failure to share the vision, failure of staff to buy into it, inadequate staff training, lousy staff compensation, self-indulgent executives.
10. Poor Scaleability And Uncontrolled Growth
Many SMEs that succeed too early, fail early too. Further, SMEs may have their highest sales volume just before they fail. Production systems must keep up with demand and there must be sufficient cash for expansion. Expansion must be tracked and controlled.
The above posting is taken from an article entitled “10 Reasons Why Businesses Fail” published in the American Cash Flow Journal, December 2002.
© 2006 Sanjeev Aaron Williams & Cashwerks All Rights Reserved
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