SBA says 50% fail during first year
The U.S. Small Business Administration has seen lots of small businesses come and, unfortunately, go. According to the SBA, over 50% of small businesses fail in the first year and 95% fail within the first five years. Why? What goes wrong?
In his book Small Business Management, Michael Ames gives the following reasons for small business failure:
1. Lack of experience
2. Insufficient capital (money)
3. Poor location
4. Poor inventory management
5. Over-investment in fixed assets
6. Poor credit arrangements
7. Personal use of business funds
8. Unexpected growth
10. Low sales
“These figures aren't meant to scare you, but to prepare you for the rocky path ahead. It's true that there are many reasons not to start your own business. But for the right person, the advantages of business ownership far outweigh the risks. You will be your own boss. Hard work and long hours directly benefit you, rather than increasing profits for someone else. Earning and growth potential are far greater. A new venture is as exciting as it is risky. Running a business provides endless challenge and opportunities for learning.”
GMA3000 is here to assist your company in planning, executing and management. Be proactive!