The Top Five Reasons Small Businesses Fail

Get these wrong and you’re pretty much doomed.

I run two successful businesses and have failed at a couple more; when looking objectively at why I in particular and more generally, other businesses have failed, I think there are some common factors:

• Not identifying your audience clearly — You need to segment your audience and make it as distinctive as possible. Having a clear niche to market to and communicate with is essential to success
• Not having a product or service that your audience is willing to pay for — You need to clearly define what your business offers, particularly the benefits to your users, why does it matter to them?
• Not being able to articulate exactly what you want to do — Having a vision for where you want to be in a month, three months, six months, a year, etc. is vital
• Not managing financials / cashflow — Having a plan and tight control of finances is essential
• Not actually producing something soon enough — Prototype, develop, get it out there — An idea does not generate success by itself, it needs to be executed

Ultimately, it doesn’t matter how much theory, skill and ambition you have — A successful business needs to understand precisely what it is trying to do for its audience, deliver something they care about (and are willing to part with cash for), have a plan in place and enough financial management to help you reach it.

Copy editing for business topics provided by Tara Foss.

Originally published at www.quora.com.