Here they are, in order of their importance:
- Lack of direction. Business owners often fail to establish clear goals and create plans to achieve those goals, especially before starting out, when they fail to develop a complete business plan before launching their company.
- Impatience. This occurs when business owners try to accomplish too much too soon, or expect to get results far faster than is truly possible. A good rule to remember is that everything costs twice as much and takes three times as long as expected.
- Greed. When entrepreneurs try to charge too much to make a lot of money in a short period of time, failure isn't far behind.
- Taking action without thinking it through first. An entrepreneur acts impetuously and makes costly mistakes that eventually cause the business to fail.
- Poor cost control. An entrepreneur spends too much, especially in the early stages, and spends all their startup capital money before achieving profitability.
- Poor product quality. This makes it difficult to sell and difficult to get repeat business.
Insufficient working capital. An entrepreneur expects--and requires--immediate, positive cash flow that doesn't occur, leading to the failure of the business.
- Bad or nonexistent budgeting. An entrepreneur fails to develop written budgets for operations that include all possible expenses.
- Inadequate financial records. An entrepreneur fails to set up a bookkeeping or accounting system from the beginning.
- Loss of momentum in the sales department. This leads to a decline in cash flow and the eventual collapse of the enterprise.
- Failure to anticipate market trends. An entrepreneur doesn't recognize changes in demand, customer preferences or the economic situation.
- Lack of managerial ability or experience. An entrepreneur doesn't know or understand the important skills it takes to run a business.
- Indecisiveness. An entrepreneur is unable to make key decisions in the face of difficulties, or decisions are delayed or improperly made because of concern for the opinions or feelings of other people.
- Bad human relations. Personal problems and conflict with staff, suppliers, creditors and customers can easily lead to business failure.
- Diffusion of effort. An entrepreneur tries to do too many things, thus failing to set priorities and focus on high-value tasks.