Common Reasons that Businesses Fail
Most entrepreneurs and small business owners are well aware of the grim statistics surrounding business failure. A fifth of new businesses close their doors within a year and only half of small businesses survive past their fifth year. However, the news is not all bad. There are many ways to combat these odds and increase the chances of long-term success for your business. By taking a proactive approach to the challenges of business ownership, you can give your business a fighting chance.
Inadequate and Ineffective Business Planning
The saying “failing to plan is planning to fail” is especially true when it comes to small and medium-sized businesses. A lack of planning is a primary reason why businesses fail. Businesses need to have a clear mission, objectives, and strategies in order to succeed. For example, many businesses grossly underestimate their capital needs, resulting in a lack of financial resources to fund their operations. Others make mistakes in pricing and marketing, leading to low revenue.
Complacence and Poor Adaptability
Businesses that fail to remain agile and adaptable can also find themselves in trouble. In today’s rapidly changing business landscape, it is essential for businesses to be able to respond quickly to changes in the market. The ability to pivot is essential to success, as is the ability to stay ahead of trends and adjust your strategy accordingly. Unfortunately, many businesses pour their hearts and souls into their businesses and achieve a level of success, but then become complacent and cannot hold on to the success they worked so hard to achieve.
Ignorance About Legal Concerns
Issues such as taxes, employment laws, licensing requirements, and contractual liabilities can make or break a business. Most business owners are unaware of the sheer number of legal matters they must keep in mind. Weak employee agreements, insufficient training regarding harassment and discrimination, intellectual property rights infringements, and unintentional contract breaches are just some of the legal problems that can derail a business.
Many businesses wait until a legal problem has already arisen before doing anything about it. By the time they intervene, the problem has already caused irreparable financial and reputational damage.
Our Naperville Business Law Attorneys Can Help You Maximize Your Chances of Long-Term Business Success
The skilled Naperville business lawyers at the Gierach Law Firm have seen countless businesses fail and succeed. Our team understands what it takes to develop an ironclad business plan, adapt to changing circumstances, and avoid the legal pitfalls that so many businesses fall victim to.
In addition to traditional business law services, we offer an outsourced general counsel program that is specifically designed for small and medium-sized businesses. YourOCG provides businesses with the legal guidance and support they need to avoid legal problems before they arise.
To learn more about our services and how we can help you strengthen your business, call our office at 630-756-1160 and set up a confidential consultation.
Please note: These blogs have been created over a period of time and laws and information can change. For the most current information on a topic you are interested in please seek proper legal counsel.