‘[tweetmeme source=”RoseA_smallbiz” only_single=false]’ The life cycle of the typical small business is short and painful. It starts out with a dream and ends with a whimper. And in between, a struggle of Herculean proportions is played out as the owner tries to figure out why the business isn’t succeeding.

Just for as to remember: “When you examine the reasons that cause business failures, you begin to understand that most business failures are preventable.”

Let me begin with my first hand experience – my own experience. My business failed few years back then because of the missing ingredient which is – knowledge. I jumped out with excitement and invested to a business when I did not even have enough knowledge about it. Trusting that all these will be solved along the way. But I was wrong because there’s no such thing as that. Business is crucial and we have to have sufficient research made before doing business. But this is not the only reason why small business fails.

According to a study published by Jessie Hagen of U.S. Bank gives the details of the top reasons for failure:

General Business Factors

• 78% – Lack of a well-developed business plan, including insufficient research on the business before starting it.

• 73% Being overly optimistic about achievable sales, money required and about what needs to be done to be successful.

• 70% Not recognizing, or ignoring, what they don’t do well and not seeking help from those who do.

• 63% Insufficient relevant and applicable business experience.

Financial Factors

• 82% Poor cash flow management skills/poor understanding of cash flow

• 79% Starting out with too little money.

• 77% Not pricing properly – failure to include all necessary items when setting prices

Marketing Factors

• 64% Minimizing the importance of promoting the business properly.

• 55% Not understanding who your competition is or ignoring competition.

• 47% Too much focus and reliance on one customer/client.

Human Resource Factors

• 58% Inability to delegate properly – micro-managing work given to others or over delegating and abdicating important management responsibilities.

• 56% Hiring the wrong people – clones of themselves and not people with complimentary skills, or hiring friends and relatives.

Now, it’s time to assess your business to see if any of these Failure Flags exist. Then, systematically eliminate them. And if you don’t have all the skills you need, hire an expert to help you. The cost of having a professional on your team is far less than watching your business join the failure club. What do you think?