Why businesses fail and how to avoid it

The nuts and bolts of success
The nuts and bolts of success

Why businesses fail and how to avoid mistakes

Below are examples from my personal experience. What has been learned is that what is failure for one is often success for someone else. In business things are a little different than in most peoples lives. Once your business is running its now what you know that is more important than who you know. You have sold yourself as the expert in your field and now you have to prove it. This applies to what you are selling or the service you are providing.

It however does not apply to having all the knowledge needed to keep the business end running. Being an expert in your field doesn't cover everything, there is always something new to learn so a wide range of friends and business contacts will help immensely. Remember to treat each new contact and customer as you would a good friend.

This is what has worked for me. Anyone who gives me money is a friend even if they have received value for it. Contacts have the potential to show me how to earn more or keep the tax man satisfied. So everyone has the ability to help me in some way.


Don't overlook even small details

My first move into the business world was as a manager. Two small details were overlooked which caused the business to go under a few months after it was open under my management. The owners actually lost the business because of my failure. It didn’t make me feel good and taught me a valuable lesson. Don’t over look even small details. A decision made to keep the business open seven days a week, in a small (population 320) “Mormon town” was one, and only receiving an electric bill once a year, which was not brought to my attention, was the other.

You have to have a business plan

My first business was Rent a handyman. It was well researched, no small detail was overlooked, everything necessary was in place including a good business plan and there was enough money to survive until it took off. The sixteen to twenty hours a day spent growing it were more than my body could handle, so it was sold. A good set of books, the professionalism on the phone and having all correspondence edited at least once was one of the reasons it was easy to sell. In this instance the business failed for me but the new owners ran it at a profit for years.

Resources and friendships

Knowing time was important to me the next businesses was a partnership. It was closed when my partner retired. He retired three years before our original plan because two of his friends had died shortly after they retired. There was not yet enough money for me to buy the equipment he had furnished to keep it going or enough time to find another partner.

Know your limits and live within them

Taking with me the lesson learned from the last partnership, my next partnership was in a roofing company. It kept going after my retirement from roofing. Statistics had shown at that time the average life expectancy for a roofer who worked over the age of thirty five was seven years. One friend and one relative had gone beyond that limit and had fallen off roofs to their deaths. There was no wish on my part to join them. This time a good business plan had been written and followed so my partner was ready to buy me out when the time came.

Learn everything you can before you invest

The next business was muddled mess, my roommate borrowed my credit card to buy an internet site. Everything got messed up when both names appeared on everything. Soon calls and letters started coming in saying you have to pay for this and that. Another company approached me and said we can straighten everything out if you buy this schooling from us. It was an offshoot from the site which had been purchased. They made a recommendation that the business be incorporated, a business plan paid for, and that a bookkeeping service would be necessary for help with tax deductions.

Never invest more than you can afford to lose

Those items took my credit card $2000 over the limit so when the monthly bills for the business started coming in they were sent back. There was not enough capital, even borrowed to get it off the ground so it was never really started. Make sure you have enough capital and keep close tabs on your credit card balance if you are using that route. The best way to go is a Small business loan. This way you have one payment which is easier to make while the business is in the start up phase.

If you don't have these don't start an online business

When starting a business, this includes online businesses, there are two types of output required. One is money to live on until things are moving well, the second is time. To my knowledge there is no way around either. Even "going with everything free" a person has to have a roof over their head and food to eat,

If you have time and an outside income but no money to start a business

You can start earning an online income without spending a single penny as long as your willing to spend hours researching everything available, or already have your own idea. If you don't have your own idea there are programs which are free to join and have no monthly fees. If you really invest time you will learn enough to survive within a matter of months. These are best used with an auto-responder as is true with any online business. To my knowledge there is one available online free and one that can be purchased with Virtapay.

One thing to avoid for internet marketers

It is highly recommended to avoid sites where you have to buy and product monthly which require people below you to earn your income. The current trend is businesses which work by selling to people and business who are under utilizing what is available online. Many of these companies offer the ability to earn from people who sign up below you. Just make sure your income doesn't entirely depend on the ones below you doing anything. It takes time and money to gain qualified people below you.

If you don't succeed the first time don't be afraid to try again

The best thing you can do if you fail is try again. Check over everything you did, figure out what mistakes you made and avoid them the second time around. Remember if you put together a good business plan and follow it your chances of success increase by about fifty percent. Find the right fit, research it well, make sure to check even the smallest details, then go for it.

From the ashes

In our case the corporation formed for the original online business was still intact. For a while however we weren't aware we had a product or service. Not wanting it to go to waste we found a way to use it. This is where the hubs about the bet started.

Having been badly hurt by the first business we decided to see if there was a way to earn money helping others who are as bad off or worse than we are. Months of research showed there were possibilities which we then checked into. While doing this research we also found we actually owned rights to three websites. We have spent time building upon what we found and added new services which help people and our local economy. Now we have a system where everything fits together to help a lot of people and it is working.

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Comments 12 comments

wheelinallover profile image

wheelinallover 4 years ago from Central United States Author

In reality this hub is about planning. Each time planning was a major part of a business starting decision, in some form the business succeeded. There are many times a business won't be paying enough for a person to survive for a year and sometimes more. If you don't have money put back to live on at some point you will be hurting badly or have to shut down the business to earn enough to pay the bills.

Thank you Brett for your input.


Brett.Tesol profile image

Brett.Tesol 4 years ago from Somewhere in Asia

Very sound advice for offline and online businesses. The money, time and research are vital, as you say. So many start looking at the basic costs, not considering that money might not come in steadily for a year or more ... something that needs to be planned for. Cutting your losses is hard too! But, you have to decide on an amount and try to stick to that initially ... otherwise things can spiral.

Shared, up and useful.


wheelinallover profile image

wheelinallover 4 years ago from Central United States Author

Mukesh are you passionate about what you were doing? Do you know what mistakes you made? Did you learn how to avoid them? If those three questions were answered 1. yes 2. yes 3. yes than you can go back into the business you were in.

If not take a good look at what you are passionate about. Take what you did learn and work towards a new business which your passion is part of. When passion is involved no matter how "hard" you feel the work is you will keep going. In most cases work now becomes fun, because your doing what you love.

Think about it this way. What would you like to be doing every day? This is what you are passionate about. Base your business on your passion and you can't go wrong.


mukesh 4 years ago

i fail in medicin wholesale businessin 1 time .what i will do again.other business do or try again time this business.


wheelinallover profile image

wheelinallover 5 years ago from Central United States Author

Every business off line and on are first and foremost businesses. From the first hub a writer publishes on hub pages, whether they like it or not they are now in business. What we do with that business is up to us. Most of the people I have met on hub pages don't have a business plan.

Writers seem to have more of a problem with this than anyone else. It seems unique content is harder to come by than most people understand. Others under utilize it for other reasons like time constraints.


Rebecca E. profile image

Rebecca E. 5 years ago from Canada

as always excellent advice, and what is true for teh "offline" world is also true for the online world.


wheelinallover profile image

wheelinallover 5 years ago from Central United States Author

I really believe your head is in the right place. Everyone needs help at one time or another. To really succeed we need to find what blocks our mind and do away with it. All of life is a learning process and what we learn make us who we are. It's harder to unlearn things which can hurt us. I guess I am lucky, the more I learn the more I find I still want to learn.


Bruce rapoza 5 years ago

I want to thank you for your advice, we all have to teach, look out for each other. After all I'm a self help kind of a guy, did'nt finish high school but in latter years became successful in home building. I started that buisness only knowing the basic, to going to building any style or size home and got there by learning from all the differnt people that worked for me over the years. Like what you wrote, very helpful. I see that your not a quitter you keep going. "A QUITER NEVER WINS-A WINNER NEVER QUITS"

Thank you again, Bruce J. Rapoza (Life Coach)

P.S. I'll never stop learing from other people, when you think you know it all your head is to BIG and your learning process stops. Please take the time to check out my web site and jump on my mailing list to get a free quote M-F www.getquotesforlife.com


wheelinallover profile image

wheelinallover 5 years ago from Central United States Author

One thing I have learned in the past few months is there is a lot of JUNK ideas which all cost in one way or another. Hub pages seems to be one of the safest ways to earn money. It's price is time, and our original work, which many have found on some other site making money for someone other than who it was intended. I still haven't figured out if I write my life story if I still own the parts of it which are published here.


prairieprincess profile image

prairieprincess 5 years ago from Canada

Thanks for sharing your experiences, so that other people can learn from them. In every endeavour, we have the opportunity to learn and grow from it. I am trying to make money online, too, and it's a hard road. Interesting hub!


wheelinallover 5 years ago

For people thinking about starting a business its important to know why others fail, so putting my mistakes out for the world to see might actually help someone.


Susan Miles profile image

Susan Miles 5 years ago

Great information! Starting and owning a business is risky and hard work. I agree that time, money and the right decisions are critical to a businesses success.

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