Common Reasons For The Failure Of New Small Businesses

According to the textbook, there are 12 common reasons for the failure of new small businesses. This is not an inclusive nor industry specific listing. Leadership Issues 1. Managerial incompetence 2. Lack of strategic planning 3. Lack of relevant experience 4. Inability to make the transition from corporate employee to entrepreneur Marketing and Sales Issues 1. Ineffective marketing 2. Uncontrolled growth 3. Overreliance on a single customer Financial Issues 1. Inadequate financing 2. Poor cash management 3. Too much overhead Systems and Facilities Issues 1. Poor location 2. Poor inventory control (Bovee Thill, 2011) It is essential for any future entrepreneur to strategically plan the opening of a business. When setting the foundation for a company, it is imperative that one considers the following: What is your offering and market demand? (Write a business plan) What will be your pricing? Estimate how long it will take to make your first sale. Determine what your differentiators are. How will you market? Brush up your sales skills. How to execute the steps needed to take project to completion. Financing options? Business location? What business structure are you going to adopt? How to obtain a tax ID, registering with tax authorities, applying for permits and licenses, and hiring of employees/training. It is equally important to ensure that you do not fall into a â€Å"motivational collapse† while pursuing your dream of successful business ownership. Additionally, it isShow MoreRelatedAnswer Chapter 1 Entrepreneurship the d1198 Words   |  5 Pagesthe market with corporate cast-offs, an attitude that small is beautiful, international economic development due to the fall of communism and the capitalization of former state-owned industries, a dream of freedom and independence, perseverance in achieving results, and the opportunities presented by an ever-changing environment. 2. What is an entrepreneur? 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