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1) Poor Management

Many businesses start up rapidly and only pay attention to their products or services. In many cases, a business will begin with an individual, partnership, or even a family. Usually, their priority is to focus solely on their own skills, experience, and knowledge. They then try to run the operations the way they want to. This is typically the wrong way to start a business.

Management has to deal with accounting, hiring employees, advertising, inventory, pricing and sometimes even regulatory issues. In many instances, a business owner should consult a professional who has decades of experience in a certain industry. If they do not have the funds available, they should at least speak to a friend or colleague that has the experience. In the end, investing a few hundred or even thousands of dollars to speak to a professional can save management and owners from making catastrophic mistakes. 

2) Having No Marketing Plan

 Most of the time a business owner will start without an in-depth marketing or advertising strategy. At first, many managers and owners tend to believe that word of mouth is the primary strategy to acquire new customers. Unfortunately, it typically doesn't work. Once a well organized marketing plan is put in place, a stable, customer-base is typically created. Marketing plans can be exceedingly complex and expensive. Many times they involve making public appearances, donating products, high-end advertising (newspapers, magazines, TV, radio, websites, billboards) and fliers. A marketing plan is a critical part of a business and without one a company could end before its doors even open.

3) Lack Of Online Exposure 

Around two decades ago, some businesses decided to start their very own website. At the time, it seemed to be a non-necessity. Today the game is completely different. Online exposure is either having a website, directly advertising online, or being active in forums or social media. A website will not just get your business name known, but will give customers the option to purchase your products directly on the website. Some companies may be in the food service or a mom and pop shop selling clothes. They may believe a website is simply, just not necessary. Statistics state that websites tend to drastically increase not just sales, but overall name brand recognition.

4) Bad Location 

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When one looks to buy real estate, what are the three magic words? Location! Location! Location! This applies for businesses as well. Historically, many companies may see some early success at a certain location, then are plagued with some serious issues. This is usually location related. Some areas can turn bad, where the poorer classes of people move in. Ultimately, this makes it harder to sell products and/or services. Moreover, many times slow traffic areas can be a damper on overall business sales as well. Finding a magnificent location is tricky. One must consider finding a location that is busy, safe, and constantly expanding, in order to begin a successful company.

5) Over-Expansion 

In some instances, businesses tend to get a bit ahead of themselves. They think too far into the future and not on the present situation their business is in. Expansion is another word for “making more money” in the corporate world.

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Expansion is another highly complicated part of a business. Most of the time companies will be forced to take out loans to expand their operations. Loans could be a doubled-edged sword. Yes, they can give the business funds quickly to expand, but they could also cause colossal problems. Debt repayment and interest charges could quickly reduce a company's net income. At the same time, expansion can cause a new set of unexpected expenses (such as new employees, taxes, rent, higher utility bills, shipping costs, etc.)  

In conclusion, one should view starting a business as a behemoth project. Albeit, it could be a project that is well worth the time and money invested. There are millions of successful companies out there, and they all had to start somewhere. One must be aware of the risks and rewards associated with starting a business and should definitely consider these five reasons that most businesses usually don't survive.