1. If you start with the wrong objectives.

Are you starting your business because you are bored with your job? Are you starting your business just because you don't like your boss? Is your primary motivation to make money? Do you want to become an entrepreneur just because you friend became one?

If your objective is also on similar lines, then I can assure you that your failure is almost guaranteed. If you think carefully, you will realize that most of these are ‘negative emotions'. You cannot have the passion and the desire to win, if you start with negative mindset. There will be no vision, no planning and no focus, which are so essential for the success of any venture.

More often than not, you will start with a half-baked idea, which is sure to flop.

2. If you fail to plan, you plan to fail

Failing to plan is as good as planning to fail. Unrealistic assumptions and lack of proper & honest assessment of various inputs & outputs will lead to problems. Some of these could become quite serious and threaten the very existence of your business. Don't just get up one fine morning and say to yourself ‘I am an entrepreneur from today'. Business is a very serious business. It is always better to overestimate costs and expenses and underestimate revenues and profits. Most people do the opposite and then find themselves struggling and ultimately failing.

For example, instead of saying that "I will set-up a business next year', you must have a written plan stating - (a) I will make this product or provide this service, (b) My business will be up & running 12 months from today, (c) I will reach 10,000 customers and (d) It will generate a revenue of US$ 100,000 in the first year.

That's planning. That's being specifically goal-oriented in terms of targets, options and deadlines.

3. If you do not understand the cash flows

Money is like blood. Its' constant flow is a must if the business is to run smoothly. Many business failures happen because the money flow stops. Many 'profitable' businesses have had to shut shop, as there wasn't enough money left on day-to-day basis to run the business. People, who did not understand this distinction between profits and cash-flows, failed in their business.

Cash is king. You have to be very clear about credit terms, payment terms, inventory etc. so that you can track the money coming in and the money going out.

4. If you are not good at managing

Managing a business involves a very wide variety of activities such as planning, organizing, communication, etc. spread across many functions such as marketing, production, finance, procurement etc. A business owner needs to be well versed with these, if he has to run a profitable business.

Businesses fail if the ideapreneur is not prompt in taking decisions; businesses fail if the ideapreneur is not particular about deadlines; businesses fail if the ideapreneur does not prioritize things properly; businesses fail if the ideapreneur does not communicate effectively.

There were many dot com failures despite money & ideas being available in plenty. The problem was that many of the ‘young software guys' were good at just writing software. They did not have the requisite management experience or understanding. They could run great software programs but not the software business. They did not give due attention to money management, revenue/profit targets, customer service, employee management etc.

5. If you do not have entrepreneurial traits

Attitude is the key attribute of a successful entrepreneur. If you don't have the right attitude or chutzpah, failure is more or less certain.

If you lack leaderships or people skills, if you do not have the burning desire, if you are not willing to work hard and sacrifice, again failure is quite likely.

Yes, some of the qualities are in-born, but you can still win if you are willing to work hard to improve yourself and train yourself in weak areas. Sometimes it is the negative conditioning, which may make you risk-averse.

6. If you cannot sell you idea effectively

Selling is the key to practically any business. Experience shows that most people don't plan their sales properly and then suffer. This is truer of people like engineers, who are more technically inclined and in love with their products.

Failure to sell the right product to the right people at the right price will lead to business failure.

7. If you build bad relationship with people viz employees, suppliers, partners, etc.

Employees, business partners and suppliers play a very critical role in any business. If you choose the wrong people, your business can suffer very badly.

Many businesses have closed down due to labor problems. Many people have been cheated by their more savvy business partners. Bad suppliers have been killed businesses by not ensuring timely and proper quality supplies.

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