Top Ten Reasons Businesses Succeed

1. The experience and skills of the top managers.
Over half of business failures are directly related to managerial incompetence.

2. The energy, persistence and resourcefulness (the will to make the business succeed) of the top managers.
Many business owners have failed or come close several times before their “instant” success. Don’t give up.

3. A product that is at least a cut above the competition and service that doesn’t get in the way of people buying.
There must be a compelling reason to buy; the product is great, the people love to provide service, and the buying experience is easy and fun.

4. The ability to create a “buzz” around the product with aggressive and strategic marketing.
Make scarce marketing resources count. Do as much homework about your customers and their choices as you can before investing your marketing dollars.

5. Deal-making skills to sell the product at the highest possible price given your market.
It comes down to your customers’ perception of the value of your product and sometimes the power of your personality.

6. The ability to keep developing new products to retain and build a customer base.
Consider gradual product development based on improvements to the current product line and sold to the current customer base.

7. Deal-making skills to work with resource suppliers to keep costs low.
Keeping costs lower than competitors’ and continuing to look for cost reductions even when the business is profitable is key.

8. The maturity to treat employees, suppliers and partners fairly and respectfully.
Trust and respect result in productivity increases in ways that may be difficult to see and quantify.

9. Superior location and/or promotion creating a connection between your product and where it can be obtained.
Studies have shown it can take seeing your product or name seven times before a customer is ready to buy.

10. A steady source of business during both good economic times and downturns.
Over the long term, develop a product mix that will include winners during good economic times and other winners when times are tough.

The 63 Most Common Reasons For Business Failure

1. 
   Failure to focus on a specific market because of poor research
2. 
   Failure to control cash by carrying too much stock, paying suppliers too promptly and allowing customers too long to pay
3. 
   Failure to control costs ruthlessly
4. 
   Failure to adapt your product to meet customer needs
5. 
   Failure to carry out decent market research
6. 
   Failure to build a team that is compatible and has the skills to finance, produce sell and market
7. 
   Failure to pay crown taxes (PAYE and VAT)
8. 
   Failure of businesses need to grow. Merely attempting stability or had even less ambitious objectives, businesses which did not try to grow didn't survive
9. 
   Failure to gain new markets
10. 
    Under-capitalisation
11. 
    Cashflow problems
12. 
    Non-payment by customers
13. 
    Poor sales & marketing
14. 
    Fatal leasing agreements
15. 
    Loss of financial backing
16. 
    Tougher market conditions
17. 
    Poor management
18. 
    Directors aiming to find new markets, but not making a single sale
19. 
    Companies diversifying into new, unknown areas without a clue about costs
20. 
    Companies finding that staff set up as rivals and stealing the business
21. 
    Company directors spending too much money on frivolous purposes thus using up all available capital
22. 
    Loss of market
23. 
    Tax liabilities
24. 
    A lack of working capital
25. 
    Bad debts are the cause
26. 
    Personal extravagance
27. 
    Fraud
28. 
    Legal disputes
29. 
    Falling property values
30. 
    Poor management
31. 
    Unsuitable people starting small businesses without the skills or resources they need to succeed
32. 
    A lack of orders
33. 
    A lack of control over cash flow
34. 
    Lack of good management
35. 
    Bad management of the capital available
36. 
    Marketing problems
37. 
    A failure to plan ahead, beyond the day-to-day running of the business
38. 
    Marketing problems
39. 
    General rise in costs
40. 
    Bad financial management
41. 
    Poor forward planning
42. 
    Too heavy reliance on grants
43. 
    Poor collection of debtor book such as greater than 45 days
44. 
    Extended lines of credit
45. 
    Rising work-in-progress that is not billed on time
46. 
    Diminished cash balances
47. 
    Purchase orders being made by expanding payment periods, not by cash
    Over-reached overdraft facilities
48. 
    Poor cost control with too many people responsible for purchasing
49. 
    Lack of long-standing relationships with suppliers
50. 
    The business widening its range of suppliers simply to make more credit available
    Rising stock levels and static sales
51. 
    Contract disputes
52. 
    Final demands and writs being received
53. 
    The business being reliant on one or two customers which do not pay as well as they used to
54. 
    Borrowings being increased just to keep the business running
55. 
    Outstanding debtors or potential bad debts seem to have rising suddenly
56. 
    The business is unsure how much it owes and how much it is owed
57. 
    The business is more than one month adrift in payments to the Inland Revenue or Customs and Excise
58. 
    The bank is calling the business to say it has exceeded its overdraft limit
59. 
    Under pricing
60. 
    Over trading
61. 
    Poor quality of product or service
62. 
    Bad labour relations
63. 
    Niche businesses - These suffered from narrow customer and supplier bases and an inability to react to changes in the market