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.