By: Debbie Dragon
Starting your own business is not for the faint of heart. According to the U.S. Small Business Administration, half of all small businesses will fail before reaching their fifth anniversary. With a 50% chance of failure, individuals starting a small business have many challenges to overcome for long term success. For the 50% who succeed, owning a small business can provide financial security for the business owner and their family. Unfortunately, for those who do not succeed, failure represents the loss of not only future financial security, but in many cases, financial insolvency in the present. Recognizing the signs that your business is headed in the wrong direction may help mitigate the financial loss. Here we look at signs it may be time to call it quits and possibly salvage some of your financial stability.
What Makes A Business Fail?
There are dozens of reasons why a start-up or small business in the early years may fail. Some of the more common reasons include but are not limited to; lack of sufficient capital, lack of experience, using business funds for personal use, competition and poor credit arrangements. All businesses require available cash flow to not only function, but grow. In many cases, a small business is primarily funded by the owner, family, friends and a handful of investors. Without sufficient capital, even the best business, managed perfectly cannot succeed.
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