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Tuesday, August 22, 2006

Top 10 Reasons Why Businesses Fail

Bobby Guy, an attorney in Nashville, practices bankruptcy law. How often do entrepreneurs get to hear from a person who understands business failure from the inside before they start their ventures? He likes to give a talk called “A View From Down-Under: The Top Ten Reasons Companies That Should Make It…Don’t.”

And here are his Top 10: (drum-roll please....)

10. Over-expansion
9. Poor Capital Structure
8. Failure to Control the Controllable Costs
7. Failure to Prepare for Volatility of Uncontrollable Costs
6. Add New Products or Divisions that Drag Down the Profitable Ones
5. Poor Internal Controls and Execution
4. Poorly Designed Business Model
3. Reliance on Critical Financing that Dries Up
2. Failure to Adapt to a Changing Market

AND THE #1 REASON? Top Management in Complete Denial......

BOTTOMLINE: Hmmmm.....What if an organization would use a systematic business-building methodology, designed to focus on execution - along with integrated Internet technologies to make the repeatable processes practical - along with a local business coach who helps the organization keep on track?

Not only would the organization be in a better position to avoid these Top 10 reasons, they'd have a built-in process to continually improve it.

(Thanks to Dr. Jeff Cornwall at The Entreprenurial Mind for this one)

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