There are many things that can ruin a business, but here are the 10 leading reasons why some businesses fail:

• Launching the business with little to no planning
• Lack of sales due to failing to understand your market and customers, or the wrong pricing, or the wrong location, or poor customer service
• Poor marketing that doesn’t attract any attention or build any demand for your product/service
• Running out of money due to cash flow problems, or starting off with crushing debt, or poor financial management
• Underestimating or ignoring the competition
• The product/service lacking uniqueness and value
• Insufficient capital or funding
• Inexperienced or poor management
• An unprofitable business model from the beginning
• Damaging economic conditions

The purpose of planning is to successfully build your idea into a strong, sustainable business that has the best chance to succeed. The heart of the planning process is to avoid the reasons businesses fail by:

• Confirming that your business idea will actually work
• Determining your start-up and monthly costs so that you don’t run out of money before everything is in place, or start off with crushing debt
• Ensuring you are targeting the right customer base with the right prices from the right location
• Understanding your competition so that you can be better than them and grab a good share of the market
• Creating an effective marketing strategy that will attract attention, create demand for your product/service, and bring customers into your business
• Defining what makes your business and product/service uniquely valuable to customers, and thus separates you from the competition
• Ensuring you put good financial management systems in place

Many businesses fail due to poor or inexperienced management, and many people attribute this to the owner not being a born entrepreneur. Not so. Anyone can be an entrepreneur. Becoming a successful entrepreneur starts with mindset, is built with education, and polished with competence.

Entrepreneurs are made, not born
Many businesses fail due to poor or inexperienced management, and many people attribute this to the owner not being a born entrepreneur. Not so. Anyone can be an entrepreneur. Becoming a successful entrepreneur starts with mindset, is built with education, and polished with competence.

Mindset
Clearly you have an entrepreneurial mindset as you are here, planning the start of your own business

Education
Planning allows you to see where you need to educate yourself on the skills you lack, or hire skilled employees, or outsource work to competent professionals.

Competence
Mastering entrepreneurial competency is created through dedication, the years of life and work experiences behind you, and the commitment to never stop learning. The planning process is one of the biggest contributors to your competency because it forces you to think through and formulate every aspect of your business which prevents you from the fatal mistake of jumping blindly into a business that is full of flaws
No planning = no funding

No matter how brilliant your business idea is, no one will help your business with funding if you present them with an idea, but with no solid plan to back it up that clearly demonstrates that your business has a chance of being successful.