It is no longer news that an overwhelming majority of small businesses fail within their first year of founding.
What is news is that the reasons for these failures are in almost all cases very similar.
These reasons are known and have been around since people began to get involved in the organization of men and materials for the purpose of pursuing an economic venture.
That is what is now known as a business.
Fact is, those who know and are able to do all in their powers to successfully work around these reasons are the few who succeed in their chosen businesses.
They are the ones who manage to become successful entrepreneurs.
The reasons for frequent small business failures may be many and varied but they can all be traced to only three main reasons.
Firstly, many small businesses fail because the owners lack sufficient knowledge to operate the businesses.
The core knowledge of any business is the seemingly intangible but very important possession that every entrepreneur must have and be able to update from time to time if he wants to remain in business for any appreciable length of time.
It is this core knowledge that makes a business unique and different from any other.
It is this knowledge that evolves into the product or service that the business is involved in and how the operators will go about making the product or rendering the service.
It is priceless and extremely valuable.
Without it, you may not be able to start a business at all.
Even if you do manage to start one, without this knowledge, you can not expect to survive for too long in the business environment.
Lack of it is a major cause of many business failures within the first year of founding.
Secondly, many small businesses fail because their owners do not have sufficient passion for what they do.
To succeed in a business, you must get involved in doing what you love to do best.
You must have a passion for the work and a strong belief in what it is capable of achieving.
In short, when you know what you are doing, you enjoy doing it well and you believe in it, that is passion.
Passion involves emotions that drive people to achieve.
It drives you to continue to push on even when there are plenty of obstacles in your way as there inevitably will.
It encourages you to find solutions to problems fast enough to keep your business afloat.
It is the passion you have for a business that keeps you on track even when the situation appears hopeless.
Without a consummate passion for a business by its owner, the chances of succeeding in such a business are extremely limited.
Thirdly, lack of or insufficient capital is one major reason why many small businesses fail within the first year.
Nearly everyone you ask will always identify insufficient capital as one vital reason for business failures.
It is true.
It is capital you need to invest and manage in such a way that can yield results for you in form of returns and profits.
If it is lacking or insufficient, the chances of succeeding in any business venture are very remote.
Nearly everyone in business I know is in it to make money.
If this goal is to be attained, everyone must watch out for these three main reasons for business failures and to do everything within their powers to ensure that they do not allow these reasons to truncate their plans.
It is this ability that distinguishes those who fail from those who succeed.
That is what makes the difference.
With proper planning and diligent implementation, chances of succeeding are always greatly enhanced.
Every entrepreneur must therefore be able to device fail-proof measures to curtail these obstacles if they want to succeed in their chosen ventures.