The Seven Pitfalls of Business Failure and How to Avoid Them

When you’re starting a new business, the last thing you want to focus on is failure. But if you address the common reasons for failure up front, you’ll be much less likely to fall victim to them yourself. Here are the top 7 reasons why businesses fail and tips for avoiding them. According to statistics published by the Small Business Administration (SBA), about half of all employer establishments survive at least five years and a third survive ten years or more. This is a far cry from the previous long-held belief that 50 percent of businesses fail in the first year and 95 percent fail within five years. Better success rates notwithstanding, a significant percentage of new businesses do fail. Expert opinions abound about what a business owner should and shouldn’t do to keep a new business afloat in the perilous waters of the entrepreneurial sea. There are, however, key factors that — if not avoided — will be certain to weigh down a business and possibly sink it forevermore. You start your business for the wrong reasons. Would the sole reason you would be starting your own business be that you would want to make a lot of money? Do you think that if you had your own business that you’d have more time with your family? Or maybe that you wouldn’t have to answer to anyone else? If so, you’d better think again. On the other hand, if you start your business for these reasons, you’ll have a better chance at entrepreneurial success: You have a passion and love for what you’ll be doing, and strongly believe — based on educated...

How to manage your cash flow

Your cash flow is the driving force behind your business. Every business has peak times and quiet periods, so understanding your cash flow means you can plan to cover your costs, make money and support the growth of your business. Here are some tips to help you manage your cash flow and keep your business healthy.   Forecast how much cash your business needs day to day factor in seasonal impacts, so you can operate and pay your bills during less busy times know how much cash you have at all times. Study your cash flow forecast to find where the weaknesses and opportunities are in your incomings and outgoings to help bolster your cash flow. pay your invoices on time and make sure your loans suit your needs. If you’re having trouble making payments, get help straight away. Make the most of your cash build up enough funds to have an emergency fund. You might need to cover price increases from your suppliers, payment delays or other unexpected costs. make use of interest free days on your business credit cards or take out a  Business Overdraft if your business has enough cash to spare, consider opening a high interest savings account if you need equipment, find out if it’s more cost-effective to purchase using a loan. You can spread the business loan repayment costs out over the life span of the equipment and keep your cash for the day-to-day expenses.   Keep your cash coming in   make it easy for customers to pay you quickly – invoice them straight away, give them your account details or help...