Reasons Why Most Businesses Fail

Businesses Fail - Complete Controller

Deficiencies in capital, business experience, resources, planning, and management structure are a few of the leading factors in business failures. An entrepreneur, having ample liquidity, but no idea of how to make and use a business model will have little to no success in running and keeping a business. Check out America's Best Bookkeepers

According to studies conducted by leading management experts, 90% of start-up businesses fail to surpass the three-year mark. This failure is often the result of poor planning and implementation. To combat this, the first step is developing a realistic feasibility plan and a balanced budget or forecast. Without a feasibility plan, one cannot be a successful entrepreneur. The inception of a business plan is essential when initiating any business and helps the business adhere to the roadmap laid out in the business model. Check out America's Best Bookkeepers


The purpose of the business must be evident in the planning process. It is also vital that the business owner’s experience is relevant to the use of the company. This experience will help the owner evaluate the business’s economic health during the phases of a downturn or market boom. It is equally important to stick to the budget numbers and forecast in the business plan. The owner should be familiar with the concept of project management and capital budgeting techniques. The plan should include the breakeven point of business operations and proper numbers allocated to expenses and revenue. Most businesses that fail do so because the owner did not factor in all the budgeting expenses. The incurred losses eat up the capital, and the owner has to shut down the business.


Careful and proper planning (non-financial) should also be kept in mind to avoid any business hiccups. Management structure plays a vital role in augmenting the purpose of the business. The business owner must ensure that the management structure comes equipped with the experience relevant to the company. A proper management structure in the organization accounts for adequate human resources in finance, inventory management, production, operation, production, and recruitment.  It is entirely up to the business owner whether the decision-making has to be centralized or decentralized. This function of the decision-making process has to be part of the management structure and in conjunction with the business model. If the numbers fall within the anticipated forecast, there is no reason for management to worry even if operations are running into losses. The core competency of management anticipates that initial failures in capturing the desired market share and wallet size will eventually lead to profit. Check out America's Best Bookkeepers


SWOT analysis is another feature that can help the business in preparing itself against any unforeseen circumstances. It helps in identifying the strength, weaknesses, opportunities, and threats. Understanding the market share, competitive environment, socio-cultural influence, and distribution accounts for success in any business. A business owner needs to be a visionary and exhibit positive behavior traits, both on the micro and macro level. Control over every aspect of business operation and financial expenditure should be of the utmost priority. If a business owner successfully manages to envisage the potential of business growth swiftly and aggressively, then the business operations can capture a sizeable market share.


To establish a business with the purpose of only existence, without a proper feasibility plan is just a sketch on paper. As earlier mentioned, a cash-rich person, without any business model, the purpose of business, and poor management structure, is just another example of business failure.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers