Q&A: What do you think the key factors are for small business failure in the UK?

I believe that many factors contribute to small business failure. Indeed I believe that business failure is part of eventually becoming successful in business. The key for me is to make sure you don’t lose everything when the business fails. So bootstrapping is absolute essential, don’t spend money you do not have, don’t borrow from banks, make sure you don’t get into trouble with taxes, hire a good small business accountant, learn cash-flow forecasting and with that try and understand your business dynamics.But to give you a more straight forward answer, running out of money is the ultimate problem why business fails, reasons for this are:

  1. lack of cash-flow planning;
  2. no sales or not enough sales;
  3. too high overheads and not cost control;
  4. loss of business focus;
  5. red-tape;
  6. lack of marketing;
  7. bad customer care.

Bootstrapping, sales oriented and customer focused small business has, in my opinion, the best chance of survival. ST.        

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