According to the U.S. Small Business Administration, over 50% of small businesses fail in the first year and 95% fail within the first five years.
1. Lack of Business Planning
The majority of small businesses fail within the first few years due to poor planning or no planning at all. Having a business plan can assure when problems arise, you’ve thought out a solution. Your business plan can also help you to focus on your goals and your vision, as well as setting out plans to accomplishing them. You should revisit and revise your plan annually.
2. Lack of Time Management
One of the biggest challenges for entrepreneurs is to let go. Small business owners do not need to have hands-on control of all aspects of your business. They should concentrate on the most important problems or issues facing the company. Small business owners need to delegate responsibilities and authority to others in order to be successful. Entrepreneurs fail to acknowledge the proper time for administrative tasks. Most small business owners assume the majority of their time will be spent producing and marketing their product or service. Unfortunately, this isn't always the case. The amount of time is spent on administrative tasks can be burdening.
3. Being Everything to Everyone
Trying to do everything for everyone is a sure way to set your business up for failure. Spreading yourself too thin, focusing on tasks that aren’t your expertise, creates low quality work and increases room for errors.
4. Lack of Financial Planning
Most small business owners have poor record keeping and financial control skills. As a small business owner, you must keep accurate financial and business records, you have to review your revenue and expense report each month, as well a file business taxes. If you don’t know how to do these, or don’t want to, hire someone who does.
Putting off tasks that you don’t enjoy or don’t feel comfortable doing will set your business up for failure faster than anything else. You can’t afford to waste time on non income generating tasks while income generating tasks pile up. All tasks need to be done; if you don’t like to do them (or don’t want to spend your time doing them), hire someone to do them for you.