My Fast Entrepreneur instructor and SCORE mentor, John Wyman, suggested this topic the other day for the blog,”……why do so many small businesses fail?” He gave us a list to read before our class next week. If I ran this list by a friend whose small business failed to thrive, he’d tell you that he did everything wrong on this list.
Here’s what I think. First, he didn’t believe that it was necessary to write a plan, so he didn’t have a plan (#1 on Wyman’s list). Second, he didn’t know enough about starting a business, so he didn’t partner with a mentor (#11). Third, he wasn’t good at doing the math. He thought his revenues were covering his expenses. He didn’t base this thinking on an actual analysis. He didn’t partner with an accountant (again #11). Fourth, he overspent. He grew his business too fast (#8) and didn’t have enough to cover additional expenses. Fifth, he blamed his problems on someone else (“she made me do it). He didn’t take responsibility.
Of course, there are plenty of other reasons why so many businesses fail but take heart. Sixty-seven percent of new businesses are successful, on average, after four years, according to SCORE’s Simple Steps for Starting Your Business. Only thirty-three percent fail.
Do you want to bet your future on winging it (the 33% group) or on a plan (the 67% group)?