I periodically read research reports about business failures. I always find them interesting, although often they are depressing.
Such as what I recently read. Which was research from Bradley University in Peoria, IL. This research found that 70% to 80% of new businesses fail within their first year.
And while this was frustrating enough to read, the research further stated that half of those companies which do survive the first year will fail within the next four years.
Now, let’s turn to the cause of this failure. According to Dun & Bradstreet, the number one cause of this failure is lack of business planning.
What this essentially means is this: entrepreneurs and business owners don’t plan to fail; rather, they fail to plan (which causes them to fail).
In my view, there are two types of business plans. The first is the business plan you must create when you start your company. The purpose of this plan is to ensure you have fully thought through your venture.