why small businesses fail

1. ?Thomas E. Long 2004 Why Small Businesses Fail And What Owners Can Do About It

2. ?Thomas E. Long 2004

3. ?Thomas E. Long 2004 IIB Background The Institute for Independent Business Is a Not-for-profit Research and Accreditation Organization Established in 1984 to Give Independent Businesses Direct Access to Top Business People Bringing Practical Advice & Timely Ideas to the Business.

4. ?Thomas E. Long 2004 Sold Oak Consulting, LLCHelping Acorns To Become Oaks Management Consulting Firm Dedicated to Helping the Small Business Owner Succeed Focused on Marketing, Planning, Coaching and Business Development Hands On Approach Affiliation of over 2000 Professional Consultants

5. ?Thomas E. Long 2004 Research Resources IIB SBA AT&T T.J. Ault, Ball State University Mabry Miller, Drake University Central California Futures Institute Meit Liraz, Bizmove.Com Inc Magazine Economist Magazine Paul Lemberg, Churchill & Churchill, Inc Coleman Management Services, Inc Dun and Bradstreet Alan Williams, Australian Researcher

6. ?Thomas E. Long 2004 SBA Background Mission: Maintain and Strengthen the Nation's Economy by Aiding, Counseling, Assisting and Protecting the Interests of Small Businesses and by Helping Families and Businesses Recover From National Disasters.

7. ?Thomas E. Long 2004 Small Businesses Provide Approximately 75 Percent of the Net New Jobs Added to the Economy. Represent 99.7 Percent of All Employers. Employ 50.1 Percent of the Private Work Force. Provide 40.9 Percent of Private Sales in the Country. Account for 39.1 Percent of Jobs in High Technology Sectors in 2001. Account for 52 Percent of Private Sector Output in 1999. Represent 97 Percent of All U.S. Exporters.

8. ?Thomas E. Long 2004 Data (SBA) Nationally It Is Estimated 80% Failure Rate Over 5 Years for New Businesses Half of All Small Business Fail in the First 18 Months Yet Over 31% of Business People Who Go Bankrupt Plan to Start Another Business As Soon As Possible Business That Operate Out of the Home Have a Lower Failure Rate

9. ?Thomas E. Long 2004 Data (IIB) Based on a study by the University of Connecticut, 47.7% of all private businesses fail upon the death of the founder 30% of private businesses make it to the 2nd generation 1.5% make it to the 3rd generation

10. ?Thomas E. Long 2004 The Organization of the Black Thumb (OBiT) X-Treme Management A New 12 Step Program for Small Business Owners

11. ?Thomas E. Long 2004 Small Business Failures Statistics Vary but It Is Estimated That 60% to 80% of All Small Business Fail Within the First Five Years Obit Is a New 12 Step Program Designed to Address This Problem Obit�s Goal Is 100%

12. ?Thomas E. Long 2004 The Black Thumb In Gardening People Who Have a Talent for Growth Are Said to Have a �Green Thumb� OBiT Is for Owners Who Are Committed to the Death of Their Business

13. ?Thomas E. Long 2004

14. ?Thomas E. Long 2004 12 Step Program If Observed, the Following 12 Steps Are Guaranteed to Ensure Business Failure Failure May Follow With Any One Step, But All 12 Will Insure �Success�

15. ?Thomas E. Long 2004 Step 1 � Management Management Expertise Lack of Management skill is not a problem Delegation is abrogation There�s no time for time management Of what use is a budget when it�s not followed anyway A structured organization just leads to beauracracy Training for self or employees is a waste

16. ?Thomas E. Long 2004 Step 2 � Planning Don�t Plan For Your Business Entrepreneurs are supposed to be �free spirits� and spontaneous Planning is for wimps Planning takes all the fun out of it Keep the plan in your head � makes it easy to change If forced to plan � use �shelf-ware�

17. ?Thomas E. Long 2004 Step 3 � Marketing Spend, Spend, Spend, Or Not Advertising � if a little is good, a lot is better The Internet is the future � invest heavily in a fancy site If the Yellow Pages worked in the past, stick with it Everybody reads newspapers TV is too expensive Radio is old-fashioned Don�t Network

18. ?Thomas E. Long 2004 Step 4 � Sales No Need To Plan Sales If your sales force is 100% commissioned, there is no need to plan or manage them Sales can�t really be planned anyway Stick With One Sales Approach Sell cost benefits not value, that�s too intangible

19. ?Thomas E. Long 2004 Step 5 � Product or Service Ignore Reality Emphasize functions and features Entrepreneurs are risk takers, so a �likelihood� set of odds is good enough Your dreams are what matter, not so-called reality If the world changes, just work harder and it will all work out In tough times, cut prices

20. ?Thomas E. Long 2004 Step 6 � Customers Ignore Your Customers If you have a good idea, their needs are irrelevant You know better than they what they need Customers always want what you don�t have

21. ?Thomas E. Long 2004 Step 7 � Cash Management Cash Is Cheap Your focus is on profit, so ignore cash issues Cash must be cheap since so many banks offer you loans and credit cards every day Cash can�t be planned anyway

22. ?Thomas E. Long 2004 Step 8 � Employees Pay No Attention To Employees Too much attention will spoil them It�s a buyers market, you can always find replacements Hire experience, don�t train You�re the boss, they�re just employees � what do they know

23. ?Thomas E. Long 2004 Step 9 � Innovation Never Change Once you have an idea hold onto it at all costs To change is to admit failure Change is hard Kill all new ideas ASAP After all, �we�ve always done it this way� As a a last resort, �we�ve already tried that�

24. ?Thomas E. Long 2004 Step 10 � Alliances Joint Ventures and Business Partners Don�t worry about who you Partner with, just find someone It�s OK if your partner is much bigger than you Don�t worry about formal agreements or objectives if the deal feels right

25. ?Thomas E. Long 2004 Step 11 � Advisors Friends and Family Don�t Ask For Help 50% of Small Business Owners rely for help from extended family 16% rely on a spouse It�s just coincidence that 66% of Small Business is about the number that fail in the first 3 to 5 years Professional business advisors are too expensive anyway

26. ?Thomas E. Long 2004 Step 12 � Perseverance Give Up