The latest statistics show that one third of new businesses fail within the first two years, and 50% of businesses do not survive past four years.

There are many opinions about why business succeed or fail. The World Wide Web is a bounty of opinions and facts, but many of the reasons for failure relate to the unwillingness of the business owner to acquire the necessary skills for success. Here are 7 common reasons for business failure:

1. Poor Management and Lack of Leadership is often cited as the number one reason for failure. A lack of skills in areas such as finance, purchasing, selling, pricing, and hiring and managing employees can bring down a business. A lack of leadership resulting in neglect of a business or an inability to think strategically can also be its downfall. Many a small business has been brought to its knees by fraud because the owner has not taken the time to be educated and alert to fraud, and put controls in place to avoid it.
2. Lack of Planning Many small businesses fail because of fundamental shortcomings in their business planning
3. Insufficient Capital is a common fatal mistake for many failed businesses. Business owners often underestimate how much money is needed for the business to have a fair chance to succeed.
4. Overexpansion. Many a bankruptcy has been caused by rapidly expanding companies.
5. Location, Location, Location. A bad location can spell disaster to even the best-managed enterprise.
6. Starting the business for the wrong reasons. You want to make a lot of money; have more time with your family; you won’t have to answer to anyone else.
7. No Website. Simply put, if you have a business today, you need a website

All these reasons for failure can be overcome by recognizing that you don’t have the knowledge and skills and seeking out a professional who can help you acquire the knowledge you need. As a professional accountant I use the term “client” to describe those people who use our services. The reason we use this term and not customers, is because a client is someone that we have a duty to care, guide and protect. Acquiring the knowledge you need to be a business success will take many years as it will be acquired on a just in time basis. The business road is bumpy and can be lonely, but wouldn’t it be comforting to know that you have a professional by your side to care, guide and protect you along the road?

Here’s a quote that explains why I love working with business owners:

“When it comes to the success of any new business, you — the business owner — are ultimately the “secret” to your success. For many successful business owners, failure was never an option. Armed with drive, determination, and a positive mindset, these individuals view any setback as only an opportunity to learn and grow. Most self-made millionaires possess average intelligence. What sets them apart is their openness to new knowledge and their willingness to learn whatever it takes to succeed.”