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Why Small Businesses Fail

by dynamaxbusiness

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Success in business is never automatic. It isn't strictly based on luck although a little never hurts. It depends primarily on the owner's foresight and organization. Even then, of course, there are no guarantees. Starting a small business is always risky, and the chance of success is slim. 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 experience
  2. Insufficient capital (money)
  3. Poor location
  4. Poor inventory management
  5. Over-investment in fixed assets
  6. Poor credit arrangements
  7. Personal use of business funds
  8. Unexpected growth
  9. Competition

10. Low sales


More Reasons Why Small Businesses Fail


  • These figures aren't meant to scare you, but to prepare you for the rocky path ahead.
  • Underestimating the difficulty of starting a business is one of the biggest obstacles entrepreneurs face. However, success can be yours if you are patient, willing to work hard, and take all the necessary steps.
  • Do You Have What It Takes?
  • What does it take to be an entrepreneur? Which personality traits make for success? Let's see if you have what it takes.
  • FICTION: To be an entrepreneur you must be born that way.
  • FACT: Anyone can learn to operate like an entrepreneur.



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