The real reason why individuals or groups set up companies is to maximize wealth or satisfaction. So, setting up a company does not automatically result to profit making or revenue generation. Certain principles and steps need to be taken before the business objective could be achieved; any deviation from these principles or fundamentals, things might fall apart and the center (profit) might not hold again.

The attainment of the corporate or business goal strictly fall on the owner(s) of the business, any attempt to compromise generally applied principles; doom might be knocking at the door of the business owner(s).
Some of the principles sound simple while others seem like illusion, but their application is not negotiable; as none compliance to them are the reasons for most business failure.

1. Poor Planning
He that fails to plan, plan to fail!
All human endeavours require proper planning before actions are taken.
Immediately a business idea is conceived and a decision to act on the idea is taken, the next bold and appropriate step to take is to plan on how the ideas would materialise. The planning should entail how to get the necessary resources (men, material and money), how to put them to use and how to get the best result from the usage. There should also be proper planning as to the right location to site the business and the adequacy of the start-up capital.
If need be, it is advisable to get specialist or consultants in your propose areas of interest to assist in the planning, their contributions would help to mitigate against likely risk and eye-opener to likely threats and/or opportunities.

Why few businesses succeed:
Success don’t come by luck, you have to plan and work for it. Putting together a realistic business plan or conducting feasibility studies on the proposed business would help the business to stand any shock. There should be short–term, medium–term and long–term plan schedule (usually written) that covers the life of the company as a going concern.

2. Lack of Structure or System
A business is like a ‘man’ with various parts for different functions, the legs, eyes, head, stomach, teeth, etc. So, what makes a man complete is the presence of all part of the body that plays specific roles. A business must then be established with the necessary structures in place; these structures focus on the roles of various departments/units in ensuring that the corporate objectives are met. Examples of the structures in term of departments are Admin Department, Accounts Department, HR Department, among others. In putting the structures in place, there must also be a SYSTEM. The system or processes states how daily activities are coordinated in line with the goals of the business owner(s). The business systems and structures also spell out the corporate culture, ethics, policies, procedures, processes, hierarchies, responsibilities and values.

Why few businesses succeed:
Putting structures and systems in place does not automatically make business(es) successful; it is putting the right structures and the right systems that the employees must adhere to at all time. Usually, when the appropriate structures and systems are in place, lope hopes are blocked and efficiency is guaranteed.

3. Lack of Focus
When a business owner has planned and prepared to take a particular action, there is the need to be focus on it and not be distracted.
Being focused states that you concentrate on a pre–determined objective. This is being driven by the vision that the entrepreneur had about the business.
For example, if you had prepared to manufacture fruit juice as a result of a target market, it is best to focus on that and grow the market share, than going into liquor or spirit production with the same company status. An attempt to go into the production of liquor & other alcoholic drinks might be detrimental to your business because both markets have different set of customers.
A well focused business or business owner knows his or her onus and would not join the crowd in a journey that is contrary to where he or she intends to go as a destination.

Why few businesses succeed:
The focus minded entrepreneur is the one that does not get distracted by challenges. With focus, you have to ignore the discouraging comments by family, friends and dependants, but listen more to your mentors or business coaches.

4. Poor Documentation
One of the easiest ways to fail as a business owner is to ignore the essence of proper documentation.
Aside financial records, documentation entails keeping records of relevant day to day activities of the business, keeping contractual records, appointments, relevant dates, filing of memos, shipping documents, employees details, amongst others.
It is not about record writing alone, but proper filling and referencing of documents that could jeopardise business survival.

Why few businesses succeed:
Keeping proper records – financial and non financial helps the business to make the right references when needed. The business owner or entrepreneur should employ competent person(s) to be in charge of the document; whilst he/she supervises the person(s). Accessibility to the document should be restricted to the entrepreneur and other reliable employees.

5. Poor Book – keeping
Not all business owners can afford to employ accountants or accounting firm to keep records of accounts. But all business owners must keep account records.
Elementary book–keeping requires that you record the goods bought and provide corresponding records at every time goods are sold. It also entails that all credit and cash sales or purchases should be properly recorded in specified books. At the end of the day, week or month reconciliation of goods and cash that came in and went out should be done.
Most small, medium and large businesses failed in the past and will continue to fail if proper book–keeping or financial records are not kept. The act of keeping the records in the entrepreneur’s or employee’s memory or brain is a sign of business doom that would blow up the business in a short–term.
A very important act that should always be adhered to is to ensure that personal financial records are independent of the corporate financial records.

Why few businesses succeed:
The best way to have proper book–keeping or accounting records is to recruit competent accounting personnel that possess high level of integrity. The entrepreneur must ensure that business transactions are recorded as at when due; there must also be checks and balances – internal control.

6. Procrastination
The act of postponing what should be done today to another day is a slow way to wreck a business. It shows that the business owner is not fully in charge; if not, one of the best ways to succeed in business is by making the right decision at the right time for the right purpose. A deferment of a decision or action of today to the future is a sign of weakness on the part of an entrepreneur. A golden rule says that ‘you do not postpone a task that would not take more than two minutes to execute’.

Why few businesses succeed:
As the person with the vision of the company, all decisions and actions must be taken or executed at the appropriate time. Employees should not be encouraged to deter and defer instructions given on a particular issue.

7. Insensitivity
To avoid business failure, there is need for entrepreneur to be very sensitive or alert to issues that surround the business. There could be environmental issues, economic policies, political climate or other relevant business information. The entrepreneur must sometimes take proactive measures to guide against business failure by ensuring that market changes are promptly attended to. The changes could be in terms of government policies or global changes. When an entrepreneur, for example, realises that competitors have increased sales as a result of ATM card acceptance at point of sales terminals; the entrepreneur should be prompted to request for a Point Of Sale (POS) terminal too from his/her bank otherwise look for a bank that can provide POS terminal.

Why few businesses succeed:
Most successful entrepreneurs act proactively on sensitive issues, especially when it relates to having an edge over the competitors and satisfying customers excellently. Such proactiveness is usually as a result of recent or upcoming development in the industry. By getting abreast with development in the industry, wise entrepreneurs act on such information to boost their corporate position by providing what are in tune with customers’ demands.

8. Poor Cash Flow Management
A lot of individuals or group of individuals are in business without knowing the actual business dynamics of the profession they are in. Most especially, some entrepreneurs do not know the business cycle and how products or services are converted to cash. Spending based on anticipated cash is not healthy for any business entity. Likewise, the acts of using working capital for long term projects or settling debts are signs of poor cash flow management. The carrying of too much stock, paying suppliers too promptly and allowing customers too long to pay are gestures of poor cash-flow management. An understanding of the role cash plays in business is key because it is the blood that supplies life to the business.

Why few businesses succeed:
Since liquidity (cash) is essential in business, successful entrepreneurs are passionate about the frequency of cash in the system by ensuring that business transactions are usually done on cash – for – product basis instead of credit sales. Also, they ensure that cash inflow into the company sustain the continuous existence of the firm/company. Such business owners know how to balance between cash inflow and outflow.
One of the best ways to improve cash flow generation is to ensure that the income margin on products or services are substantial enough to take care of all expenses and be able to plough back to the firm or distributed as profit to the owners.
Exhibiting discipline on when, how and what to spend on would also help.

9. Poor customer services
In the business world, customers are referred to as king. So, as king, customers should be treated with respect, dignity, honour, empathy, care, enthusiasm, humility, quality products and excellent services.
A poorly treated customer will go about preaching bad service of the company to existing and potential customers; which would negatively affect the performance of the firm in terms of sales and income. It usually takes more time to win back such customers. Therefore, there is no substitute for good customer service, because such satisfied customers often become loyal customers by continuous patronage to the firm.

Why few businesses succeed:
All you have to do as an entrepreneur is to let customers know that you are in business because of them and they are the pillars of the business. The entrepreneurs do this by going extra miles for them, exhibiting empathy and consistent follow-ups. Customers should always be provided with exceptional excellent services.

10. Poor management of resources
The inability of business owner(s) to manage the resources (man, money, materials and time) at their disposal often leads to business failure. Round pegs must be stuck into round holes; the allotment of positions or projects on sentimental grounds is unprofessional as a manager of men and resources.
Poor management has to do with poor running of the day to day business activities, poor coordination of men to work as a team, poor utilization of raw materials for finished goods, poor customer relationship and poor execution of statutory obligations. Incurring excessive expenses that could be avoided could also be a trait of poor management of resources.

Why few businesses succeed:
The acquisition of the proper management skills through the classroom or outside the classroom often helps to effectively manage scarce resources. Most successful entrepreneurs are good managers because they have experienced the period of scarcity and plenty in the life of the company and have been able to manage both periods appropriately.

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