July 26, 2007 | Category: Business Resources, Graphic Design Skills |

When starting a business, we rarely think about failure or exit strategy. Maybe because of our overflowing self-confidence and passion to succeed, we completely forgot about this. We are often too busy raising capital, spying on the competition, and improving operations.

PowerHomeBiz asks 3 basic questions when starting a business. We must be fully prepared to answer the 3rd question:

If the business fails, how will it affect me and my family? As a family man with 3 kids, he always looks at the risks involved and the odds of his success. While he doesn’t believe in playing it safe, he also does not want to go blindly into something and lose everything his family has.

But why do small businesses fail?

Among hundreds of reasons, there are are two common ones: Lack of research and poor financial control.

Lack of Research

Without thorough understanding of the market and comprehensive competitor analysis, you can never compete competently and will miss important market trends. This will provoke you to take actions without thinking.

Poor Financial Control

Eager to gain more customers, we tend to overspend on our marketing and sampling initiatives. Eventually, it will lead to insufficient working capital and business closure.