It is simply staggering how many small businesses fail. For every 1 million small businesses now operating, in 10 years time just 40,000 will still be going. And of those, only about 7,000 will be profitable.
Probably the best example I see of businesses failing is restaurants. That seems like such a tough industry. No sooner is a new joint opened up that it closes right back up again. Costing the owners hundreds of thousands of dollars in many cases.
That must be so devastating for them.
From what I’ve seen in my time in business, the reason for business failure is always the same.
There really are a million different reasons why a business can fails. But it always comes back to bad management.
Lack of funds = bad management. You should have either eben better capitalized to start with, or have raised additional funds earlier.
Market downturn = bad management. You should have identified it and acted to minimise the impact.
Back to the restaurant business
Just because you are a good cook doesn’t mean you can run a successful restaurant.
Just because you are a good waiter doesn’t mean you can run a successful restaurant.
A good businessperson can run a successful restaurant without even being able to cook a meal or wait a table.
If you haven’t already, grab a copy of Michael Gerber’s classic business book “The E-Myth”. It is a brilliant look at the way business should be done.