Most small businesses fail due to a lack of essential skills, experience, and planning, with 87% of micro-businesses collapsing annually. Key issues include cash flow management, workforce handling, and marketing, all of which are symptoms of deeper problems in business acumen. To succeed, business owners should seek help from professionals and advisors rather than trying to manage everything themselves.

1. Learn from Why Businesses Fail

2. Most small business owners are frustrated. Why? Because…. Need to change Constantly blindsided Problems with their cash flow, people, sales, etc. Too much time on the job They aren’t having Fun anymore

3. “ To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, it requires a lot of disciplines .” Steve Jobs - CEO of Apple Computers and Pixar Media

4. 98% of all businesses in the industrial world are micro-businesses (25 employees or less). 87% of micro-businesses fail every year. U.S. Small Business Administration Statistics on Business Failures

5. U.S. Small Business Administration Statistics on Business Failures Old: 50% of businesses fail in first year 95% of businesses fail in five years New: 33% of businesses fail in two years 52% of businesses fail in four years

6. National Small Business Association 2007 Survey of Small & Mid-Sized Businesses Concerns: Economic Uncertainty 42% Cost of Health Benefits 39% Lack of Available Capital 31% Lack of Qualified Workers 23%

7. If you were to “ G o o g l e ” the phrase, “Why businesses fail”, you would get…. Pages and pages of lists. The Top 10 Reasons, the Top 7 Reasons, the Top 25 Reasons, etc. Lists full of cash flow problems, people problems, operations problems, debt problems, etc. But…..They’re really all just Symptoms of the problems

8. So…..What are the real reasons that businesses fail? The Business Owners lack in Business Skills Business Experience Business Planning

9. “ You can't know it all . No matter how smart you are, no matter how comprehensive your education, no matter how wide ranging your experience, there is simply no way to acquire all the wisdom you need to make your business thrive .” Donald Trump - Real Estate mogul and star of The Apprentice In other words….. You can’t know everything!

10. Most Business Owners used to have a job and a set of skills to do that job. They, at some point, decided that they wanted to “be their own Boss” and be self-employed. So, they built a business based on their old job . Over time, they learn that there’s a BIG difference between being “Self Employed” and actually RUNNING A BUSINESS!

11. In Michael Gerber’s book, “The E Myth Revisited”, he states that everyone who owns a business is actually three people in one

12. Technician Manager Entrepreneur Do the Business Manage the Business Drive the Business 90% 3% 7%

13. Technician Manager Entrepreneur Do the Business Manage the Business Drive the Business To be Successful, they must be balanced

14. “ I wanted to be an editor or a journalist, I wasn't really interested in being an entrepreneur, but I soon found I had to become an entrepreneur in order to keep my magazine going .” Richard Branson - British entrepreneur and Founder of Virgin Music.

15. Most Business Owners lack Business Skills A computer technician opens a computer shop, a musician opens a music store, a hair dresser opens a salon 90% of their capabilities involve fixing computers or playing music They may actually start off successfully and hire a few people, but Where did they get the training to handle those people, to manage their cash flow, to market to new customers, to get financing? ...... To Run a Business?

16. Most Business Owners lack Business Skills Marketing Concepts and Media Selection Sales Techniques and Compensation HIPPA, COBRA, FMLA, ADA, FACTA, MMA Tax Compliance and Regulatory Issues Corporate Structure and Legal Issues Accounting/Cost Accounting Procedures Manufacturing Productivity Measures Systems’ Software & Hardware Configuration Purchasing Practices Product Engineering Processes Cash versus Accrual Financial Reporting Personnel Development and Training

17. A small manufacturer of widgets that sells to boutique retail stores, finally makes a sale to Wal Mart. Suddenly, Orders go up by a factor of 20. Inventory goes up by a factor of 30. Accounts receivable go from 30 days to 120 days. Cash Flow dries up & Suppliers want payment. Why didn’t they anticipate this major upswing in operations and drain on cash flow? Must Experience be so painful? Most Business Owners lack Business Experience

18. Most Business Owners lack Business Experience Historic Business Cycles Traditional Industry Cycles Fluctuating Interest Rates Volatile Stock Market Activity Acquisitions of Customers or Suppliers Losing/Gaining Key Customers or Suppliers Changing Customer Preferences Manufacturing or Sales Seasonality New Government Regulations New, Non-traditional Competitors Key Resources or Materials Dry Up

19. Most Business Owners lack Business Planning A small arts and crafts retailer has a relatively successful store. She wants to expand and open another store or two. However, She can’t make any headway, because she always putting out fires. The bank won’t lend her any more money. She can’t explain where the business is going to her employees, suppliers or customers. She thinks she has a plan, but it’s in her head. How does she know where she’s going? You can’t see your future, and every decision is made in a vacuum.

20. You need a Business Plan, no matter how long you’ve been in business. Why? It will challenge what you’re trying to accomplish. You’ll be able to convince financial institutions to lend you money. It will provide you with a road map to future success. Most Business Owners lack Business Planning

21. So…..How does a Business Owner make up for their lack of Business Skills Business Experience Business Planning and Avoid Failure!

22. D o I t Y ourself works for….. Gardening Home Repair Home Decorating Car Maintenance

23. D o I t Y ourself Doesn’t Work…. Running a Business

24. So, Go Get Some Help!

25. Business Advice and Support – Most FREE Virginia Tech Corporate Research Center Vinton Area Chamber of Commerce

26. Call on a Professional Specialist CPA Lawyer Systems Tech Staffing Agency Ad Agency Graphic Designer Insurance Agent Networking Groups

27. Take on a Business Advisor who can act as your Board of Directors Business Friend Confidant Business Guide Extra Set of Hands Member of Your Team

28. Take on a Business Consultant to handle a project in Marketing/Sales Human Resources Operations Systems Product Development

29. Technician Manager Entrepreneur Get the help to reach LONG TERM SUCCESS & AVOID FAILURE

30. “ You can't know it all . No matter how smart you are, no matter how comprehensive your education, no matter how wide ranging your experience, there is simply no way to acquire all the wisdom you need to make your business thrive .” Donald Trump - Real Estate mogul and star of The Apprentice

31. Questions?