Small Business Failure

Avoid failure & become successful again

how to avoid small business failure
small business failure

The Realities of Small Business Failure

What you can do to stop the failure of your small business. Step-by-step.



Small business failure is often attributed to lack of knowledge – plain and simple. In fact, if more small business owners were aware of the programs and help that is available to them, you would hardly see any businesses closing their doors for good! Unfortunately, the “insider secrets” have remained just that: secrets. As a result, small business failure occurs around us every day.

The #1 Reason for Small Business Failure: Poor Decision Making While Running the Business

Sadly, the main reason for small business failure is that many small business owners make poor decisions that run their business into the ground. Of course, these business owners didn’t mean to make bad decisions. On the contrary, they believed they were making good ones. But, because of their lack of business knowledge, their decisions ate away their business profits causing it to go broke. For these reasons, it is important to gain as much business knowledge as possible before opening your doors.

The #2 Reason for Small Business Failure: Thinking Bankruptcy is the Answer

After watching their business slowly fall to pieces, many small business owners believe they have no other choice but to file for bankruptcy. This almost inevitably leads to small business failure. Business owners mistakenly believe that they can file for bankruptcy and still keep their business. While this is true in theory, nine out of ten find that they eventually have to liquidate the business when the bankruptcy hearing is over to pay off their attorneys and other left over fees!

Ways to Avoid Small Business Failure

The best way to avoid small business failure is to get educated. The more knowledgeable you are when going into business, the better prepared you will be to set up an effective business plan and to make important financial decisions. Similarly, if you do hit a financial roadblock (which you won't if you took the time to get educated), you will know about the many alternatives to bankruptcy you have.

Just be sure the books you read about business options are written by someone who has knowledge and experience in helping small business owners keep their business financially stable. Or, better yet, find a book authored by someone who has experience helping business prevent filing bankruptcy. That way, you know the techniques you use for your business are proven to be effective.

Guide to business turnarounds and avoiding small business failure.

Filing Chapter 11 and What that Means Exactly

So you have heard the talks on television, in magazines, and papers about the large companies filing Chapter 11 bankruptcy. They sometimes survive and come back with a new name or a new approach to their business. During the process of filing chapter 11 they have overcome certain obstacles which we will describe.

Once filing chapter 11 a company enters the court system. The courts can waive certain debts to relieve some of the financial distress. These burdens can include long-term lease agreements, unsecured loans, and union contracts. Once the court removes the financial roadblocks, a company can negotiate with the creditors and agree on the amount they will pay back and how they will do so. The business owner must come up with the plan to rejuvenate their business. If they do not provide a clear plan, then the creditors who are owed money can step in and do so. The courts may grant the creditors plan over the business owners, thus removing the business from the hands of the owner.


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