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Hidden Nuances That Destroy SMBs

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arwendt View Drop Down
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    Posted: Jul 31 2013 at 12:46pm

By Dr. Garnett Newcombe and Kay Woods, Founders of CEO Real Talk

According to the U.S. Small Business Administration (SBA), only about 50 percent of new businesses last five years or more, and only 33 percent last 10 years or more.

There are many reasons that small businesses fail,ranging from inadequate cash flow, to high overhead costs, bad management, expanding too quickly and poor credit.  However, over the years we have identified five “hidden nuances” that can, and will, quickly destroy a small business before it even gets off the ground.  

1.      Getting a Second Job

When business owners feel stretched financially, it is common to seek another source of income contingent back-up plan. However, straddling the fence will only set you up with the option to fail.  Energy put toward maintaining a back-up plan keeps you from making a full commitment to your businesses.   Instead, in difficult times scale back on the “big bold sell” and focus on the “low hanging revenue generating services” that are in high demand and have the capability of generating immediate income. 

2.      Not Understanding Your Financials

Operating in the blind puts your business at high risk for failure.  Know what you’re spending on what and where you can cut back. There needs to be systems and processes in place to control purchasing and inventory and budgets need to be followed.  It’s important that you not only generate financial reports but that you understand them.  It is your responsibility to watch over business finances not the accountant, the bookkeeper or the division managers.

Continued on SMBnow.com

“Sell not virtue to purchase wealth, nor Liberty to purchase power.” Benjamin Franklin - More at my Words of Freedom website.
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