Ever wonder why so many start-up businesses fail? Here are six key reasons…

Failure to Plan. A Business Plan should be the basis of exploring any new venture. It is also the basis for any hope of convincing investors about the merits of your concept. The Business Plan, among other key elements, should state the fundamentals of your vision, what you hope to achieve, an analysis of the competition, your unique selling proposition, financial projections, and resumes of the leadership/management of the company.

Lack of Sufficient Capital. This is so basic that it almost doesn’t need to be stated. Bottom line: You need twice as much money as your most conservative estimate. Businesses fail for a number of reasons, but one of the most important is insufficient capital.

The Wrong Leadership. The right leadership gives you a fighting chance to succeed, but with the wrong leadership, you don’t have a prayer. Often in start-ups, in particular, you are investing in the leader as much or even more than the venture itself.

Unrealistic Timeline. This is connected in some way with the requirement of sufficient capital. The reason you need much more money than you conservatively expect is that things inevitably happen that are out of your control. It almost always takes more time to develop your business than you envision.

Unrealistic Expectations and Projections. Entrepreneurs by nature are usually overly optimistic about their ideas, so you can anticipate that their expectations and financial projections will be similarly optimistic. When those projections don’t pan out, they usually claim reasons never expressed in their Business Plan. Truth is, their expectations were unrealistic to begin with.

Inability to Change Course when Necessary. The perfect plan can look great on paper, but if the marketplace dictates a move in another direction, you must take it. It’s not that your original idea was bad. The market may not have been ready for it, you may not have laid the proper groundwork for it, or you may simply have missed a key element in the planning process. Regardless, if you have the courage to change course when it appears most necessary, it will often serve you well.

Here’s something else to think about…

I’m mentoring a young man who has taken over the reins of running a small, closely held family business. The other day he asked how to deal with a somewhat difficult person under his wing. She questions a lot of decisions he makes. I said to simply, and sincerely, privately ask her how she feels things are going. He was amazed. She opened up, shared her thoughts, and had some great observations.

It should be obvious, but isn’t always, that people want to be heard. They have opinions, and as long as you are open to hearing them, they can be a great source of information, advice, and strategy moving forward. People you employ are worth your time and attention. And they have ideas and thoughts that are worth hearing. If you aren’t sure about this, one of two things has to change: either the employee has to go, or you have to be more open-minded. You are in control of both possible outcomes.

Here are a few business and life tips to think about:

Business Tips

• In down economic times, look for opportunities that others can’t see. In good times, look for waste. It’s everywhere.
• Looking for a new job? Keep your resume to one page. Be concise, but let results show. And write a beautiful, positive cover letter.
• If you want to start a new business, great. Be passionate, and be prepared to work so hard that failure is not an option.

Life Tips

• Wisdom can’t be gained in a day, but it can be gained daily. Making consistently good choices is a sign of living a life of wisdom.
• Failure can be turned into success if we learn from it. The key to surviving failure is to have optimism and perseverance.
• Helping people is the best treatment when you feel down on yourself. Giving to others is great medicine for the soul.

Tags: Business Development, Business Tips, Crisis Management, Developing Leaders, Knowledge, Leadership, Leadership Excellence, Leadership Problems, Management, Motivation, Project Leaders, Reality, Vision, Wisdom