The Top 10 Reasons Businesses Fail

Starting a small business is always risky. According to the U.S. Small Business Administration, roughly 50% of small businesses fail within the first five years, and I believe those are generous statistics.  Below are a mix of what the SBA and I (for whatever that's worth) believe are the top 10 reasons that businesses fail.

 Top 10......get it?  Hayo!

1. Lack of experience  - Someone has been training you on your existing job, but who trains you to run a business?
2. Insufficient capital (money) - Every business needs money to start, even if it is just working capital to pay personal bills, until the business reaches a profit level.
3. Poor cash flow management - Payment doesn't always match outflow and it's up to the business owner to make up the difference.
4. Lack of planning  - On average people spend more time planning a vacation or wedding than they do for running their small business.  The business should last a lot longer than a seven day vacation or one night wedding.
5. Poor location - If you don't have good traffic, parking space, signage, then you may not have customers. 
6. Competition - Always know who offers what, and what makes the two of you different.
7. Marketing - Set up a real marketing budget. It should be at least .5% - 8% of your monthly expenditures.
8. Delegation - If you want something done right you have to do it yourself.  If you want to own your business longer than a year, learn to delegate and deal with imperfection.
9. Personal use of business funds - DO NOT GET THAT NEW BOAT YET!
10. Unexpected growth - Have a growth plan and stick to it.  This may mean turning down customers.

Keeping Score in Your Business

You often hear the debate among parents about keeping score in Little League. Some parents say there is no need in it, since the kids are just having fun and learning to play the game. Other parents say that kids need to learn the value of hard work and skill paying off. Since I have a two year old little girl and another on the way, I’ll abstain from the argument…….for now. I will say that keeping score in your business is crucial. Unfortunately, I see many business owners taking the advice of the first set of parents.


Since tax season has officially ended for most businesses, right now is a good time to sit down with your accountant and make sure that you are accurately keeping records. Also review your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement on a regular basis. You don’t want to wait until April 14th, 2012 to find out that you are losing the game.

The TSBDC offers free and confidential one-on-one counseling for existing and start up small businesses.

To register for go to http://www.tsbdc.org.


Other contact information - Phone (615) 230-4780 or charles.alexander@volstate.edu.

QuickBooks Workshop - Thursday, May 19, 2011 9:00 AM to 12:00 PM

Register Here!

This QuickBooks workshop is designed for basic users and small business owners that operate a for-profit business. Therefore the course description below is focused on that group of learners.



Course Introduction:

This course is an introduction to QuickBooks. Its main objective is to introduce you to the basic features in QuickBooks and give you an opportunity for hands-on practice. You’ll learn about the types of information you need to track in your business, and you’ll see how to enter that information and track it in QuickBooks. By the time you complete the course, you’ll have a good idea of all that QuickBooks offers, you’ll be familiar with the most common tasks, and you’ll know where to find information about more advanced features.



Course Outline:

• Introducing QuickBooks

• All the accounting you need to know

• Working with lists

• Working with bank accounts

• Tracking credit card transactions

• Using sales forms in QuickBooks

• Receiving payments and making deposits

• Entering and paying bills

• Creating and customizing QuickBooks reports

Fee: $ 25.00


The TSBDC offers free and confidential one-on-one counseling for existing and start up small businesses.



To register for go to http://www.tsbdc.org.

Other contact information - Phone (615) 230-4780 or charles.alexander@volstate.edu.

Entrepreneur Quiz

So if you are thinking about starting a business, buying a business or just want to know if this whole business ownership thing is still for you, take our quiz below.  If the answer is no more than once, you may want to either reconsider or find a way to get good at that particular area.

1. Creating a practical plan with a good foundation.
2. Being dedicated to reaching your goal.
3. A basic knowledge of management, finance, record keeping and market analysis.
4. Are you a leader?
5. Do you make your own decisions quickly?
6.  Do others turn to you for help in making their decisions?
7. Will you enjoy the inevitable competition?
8. Are you sure of your will power and self-discipline?
9. Are you capable of planning ahead?
10.  Do you like people and can you work with them (strange, strangers are included)?

The TSBDC offers free and confidential one-on-one counseling for existing and start up small businesses. To register for go to http://www.tsbdc.org/.

Other contact information - Phone (615) 230-4780 www.volstate.edu/tsbdc