The task of being an entrepreneur is not an easy one. It requires so many skills that need to be learned and applied if your business must be among the lucky few that will survive the test of time. To survive the harsh competitive business world, a variety of factors must come into play: your leadership, financial and managerial skills must be sharpened.

As an entrepreneur, our brains are constantly churning. Constantly coming up with ideas on how we can help EVERYONE. Now as great a thing as this may be, it is also a not so great thing. Because it is these ideas that leads us to make mistakes that cause our businesses to fail. Mistakes that we don’t think about until it’s too late. We get so caught up that our eyes and ears are not open to the obvious. We’re so caught up in making it happen that we miss all of the warning signs. And as a result our businesses suffer. They suffer financially and by design.

The following are some of the reasons why business fails.

1. Mindset:
For your business to succeed you must possess the right mindset needed to be a great entrepreneur. An entrepreneur are naturally risk taker, they planned ahead. He must have the necessary skills needed to surround himself with the right people who will work with him to make his business a success. Any other mindset apart from this is one of the reason why business fails.

2. Leadership:
As mention earlier your business can only succeed if you surround yourself with the right people with the right skills who have been inspired to be their best on the job. This inspiration can only come from an entrepreneur who has that leadership quality. He knows how to inspire and guides his team of smart people towards his determined goals. Most entrepreneur lack this quality and they can better be described as a manager. A manager managed substandard workers and end up in doing their task.

3. Leverage:
Another reason why business fails is because it is not properly leveraged. Leverage means accomplishing more with less. As a business owner, you need to be obsessed with finding ways to accomplish more with less in all aspects of your business. Business owner who learn to leverage themselves the most will always succeed in their business while others fail.

4. Customer Data base:
Another reason why business fails is because they do not have customer data base. Customer data base is the most valuable resource your business has if you want your business to succeed for a long time. The main goal of all your marketing efforts should be to get

Your prospects to give you their contact information. Someone on your list enables you to sell to him ten times or even hundred times instead of having just one time interaction with him that goes nowhere. Another great thing about a list is that since they have purchased an item from you before, their doors are open for you. It gives you a ton of freedom to sell and promote other products to them.

5. Residual Income:
Residual money is the money that comes to you whether you continues to work or not. A business set up without a solid base of constant flow of residual income is bound to fail with time. For your business to survives the test of time you must have a product or services that you only sell once, but can sell over an over again. Better yet is a situation where you only need to sell once and the customer need to buy from you at regular interval.

6. Mentorship:
Today people with no training or skills in the world of business just start their own business without learning from those who has been in the field for long. They feel just reading books will do. To really succeed it is necessary that aspiring business man and woman start By working with a mentor, you can receive one on one attention from a professional who has expertise and will support you with wisdom, resources, and reflection regarding your wide arrears of needs. Your mentor will assist you in integrating knowledge or skills learned from practical experiences. Your mentor will act as a sounding board, lunch pad, or mirror in promoting your development and early intervention. He will also help you be accountable to your goals.

7. No savings / funds.
This is probably the number one reason why businesses fail financially. And it’s because, like I said already, of sheer excitement. You MUST have funds to start a business. A savings that you began many years ago; a retirement account or life policy you can draw a loan on; a home equity line; a rich relative. It doesn’t matter the source, just as long as you have a source. These funds need to be enough to carry you for 12-24 months at a minimum. The longer the better. Keep in mind that it takes time to build a business. It doesn’t happen overnight. So make sure you can provide a lifestyle while you building this business. It doesn’t have to be the “lavish lifestyle” you currently live and more than likely it won’t be. Just be sure you can pay your household bills and put food on the table.

8. No business plan.
This is the one element of a business that no one wants to do. Yet it is the most needed. You need a business plan to be able to help you have a clear understanding as to what you want your business to be, how you want it to grow and who you’re going to serve. And this is only the beginning. It will no doubt tell you and any potential investor a whole lot more. This business plan will serve as the roadmap and guide for how to take you business from a caterpillar to a butterfly.

It should contain all aspects of the business such as the unique selling proposition, competition, workforce needs, potential challenges and solutions, financial details and so on. You should prepare detailed and realistic estimates of revenues and costs for three years. Determine if it will all be worth the effort several years down the road before you invest your time and money and your friends and family’s money.

9. No clients.
Now this one was a no brainer. But I want to touch on because I want to point out that, yes it’s important to get new clients when you are starting you business but it’s even more important to keep those clients. Your daily goal should be not only how to get new clients but also how to keep your current clients. There is nothing more rewarding than knowing that you have a base of clients who not only continue to use your services and products but who are also raving fans and will refer you to the world.

10. No systems / structure in place.
Every successful business has a system in place. A system that everyone in the business from the owner to the lowest man on the totem pole follows. This system creates synergy within the business that leads to nothing but pure abundance. Having a tried and true system to follow allows you to operate your business more efficiently and effectively. Think about McDonalds and Starbucks. No matter which one in the world you visit, the system remains the same.

11. Not understanding the numbers.
This reason why businesses fail financially is probably the least recognized. Many business owners and entrepreneurs start a business and never take the time to learn how to understand it and manage it on paper. The can manage the daily operations of their business beyond measure. But when asked what their profit margin is they respond with a “huh?” When asked how their business is trending compared to prior years they ask “what’s trending?” Understanding the numbers of your business tells you more than how much cash is in the bank. It tells you where you money is being spent and how your business is truly being financed. It helps you strategize on where and how to make improvements.

12. Starting the business with the wrong objectives
You should never start a business for the sole reason of making a lot of cash quickly. There is also a misconception that if you start your own business, you will get more time to spend with your family and that you will always answer to yourself. However, this is unlikely to be the case. You should start a business because you’ve got a deep passion for what you want to do and strongly believe that your products and services will respond to the needs of the consumers. You should have a firm understanding of why your product is unique and why people will buy from you and not from your competitors.

13. Poor Management
Many studies indicate that poor management is the major cause of business failures. Most businesses often lack the proper expertise in vital areas such as marketing and sales, finance, human resources, procurement, production, etc. You need to put the right management team in place; a team that has the ability to study, plan, organize and control all aspects of business operations. Recruitment can be an onerous, expensive and time consuming task. If you have open or weak areas in your management team, consider the use of contractors/consultants to strengthen weak areas or fill vacancies. There are many benefits to using consultants both financial and effectiveness related.

14. Insufficient Capital
Most business owners tend to underestimate the amount of money required to run a business and end up operating with insufficient funds. Others may also expect unrealistic profits from the sales. Remember, the customer determines the price not you.Therefore, it is important to establish the actual amount of funds you will require to start and run your business. In the case of very early stage pre-revenue companies, it is important that the management team maintain their focus on the first release of a saleable first version of the product. You need revenue to survive. In my experience it always takes longer and requires more funds to do anything.

15. Lack of a Proper Website
With the rapid increase of internet users today, you need to register a strong online presence to operate a business. In a recently released survey, (January 2012), Cisco found that 74 percent of consumers turn to the web to conduct research before making a purchase in store. The findings place a premium on digital content marketing campaigns that can help answer shoppers’ questions and point them in the direction of a brand.

At the start of a business, a professionally designed website is recommended to enable users to find you and get well acquainted with your products and services.

Your Website has to make a good impression and look professional that’s a given, but having a good looking website isn’t enough. It also has to be functional and do its job of making the market aware of you and your products. Creating and maintaining a website is complex and time-consuming. Unless this is your strength and/or your line of business, get help
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