Causes of Business Failures

People who start their own businesses are often portrayed as risk takers, bold entrepreneurs who have a vision, who are unafraid to plunge.

But the statistics tell the real story: 75 to 80 percent of all new businesses sink within a year (a year is about all it takes for the risk taker's money to vanish).

The most interesting and important aspect of the 75 to 80 percent failure rate is the 20 to 25 percent success rate.

What sets successful people apart?

The people who succeed in business are not the risk takers. Those who succeed are risk minimizers, the ones who proceed slowly and cautiously, who keep their investment to a minimum, who learn as they go.

The successful new-business owner has a vision, too, but this person is smart enough to ask-and try to answer-the most important questions every new businessperson should ask:

• Is anyone else interested in this vision?
• Is there anyone out there who wants what I have to offer?
• Where are my customers?
• How will I find them?
• How will I convince them to buy from me?

Successful entrepreneurs do their homework before they get started. They are people who don't usually fail.

Find your market before you start your business. Find a need and then fill it!