Why Do Businesses Fail?

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_{Mike Levi is C.E.O. of Levi Inc. a 19 year old business advisory firm that is in the business of building and implementing sales and growth strategies for emerging businesses.} 

_{http://www.high-performancesales.com/}

Eighty-five percent of all businesses fail within the first five years. Three main reasons for this are:

1.    Inadequate funding

2.    Poor decision making

3.    Lack of a well thought out game plan

Let’s address inadequate funding first. I find that a majority of emerging businesses underestimate the amount of capital it takes to launch and sustain their businesses into a profitable entity. A good rule of thumb is to have enough capital to run your business for the first year before planning on a withdrawal of personal income. You will often find that it is going to require 1 ½ - 2 times the capital requirements that you originally estimated.

The realities of real world business are better dealt with upfront than the stress of uncertainty that comes with poor financial planning.

We will continue to address these three critical areas in the coming posts…