by Matt Mahan

Created on: July 06, 2008   Last Updated: June 22, 2009

Today, in America, the failure rate for new businesses is astronomical. If you start a restaurant or any type of food establishment, those rates climb even further. Why do so many businesses fail within the first year of opening? Most businesses fail due to common mistakes made, but not known about until sometimes it is too late. Mistakes made as early as the first thought to opening a business, can lead to a hasty failure.

Type of Business
The type of business you start can be your downfall. When deciding what type of business to open, one should take a look around at their perspective competition. If you are looking to open a pizza shop, and there are already a dozen well established pizza parlors in your area, the cards are going to be stacked against you. Conversely speaking, a Soul Food or Ethnic styled restaurant in a predominantly white area, may not be your wisest move either. Tailoring your type of business towards your prospective clientele will go a long way towards your success rate.

Lack of Experience
Some business mistakes are made due to the fact the owner does not have any, or very limited experience in the field. If you are a painter by trade, go into the painting business, not an auto mechanic. If you change your own oil, that makes you thrifty, not a mechanic. Opening a business that falls within your knowledge and strengths will help you reduce business failing mistakes.

Planning
It is often said "people don't plan to fail, they fail to plan" no statement is truer said than in the business world. Keeping one eye on the events of today while the other eye scans the horizon is a good strategy. Advertising, large yearly events, even expansion are all issues of planning. Christmas comes every year on December 25th, so if you want to sell Christmas trees, do not have them delivered to your business on the 22nd. Work for today, plan for the future, and remember the past is a great business motto to have.

Money
Money is the single biggest and most frequently made mistake in business. Money mistakes are also the hardest to rectify was they are found. Whether it be too slim a profit margin, "skimming the till", overcharging, or just being a poor money manager, these mistakes will kill even the healthiest business. Of these mistakes, the biggest ones made, especially by new business owners, is that they tend to forget that the money coming in is not theirs. It may be coming in to their business, their cash register and their banking account, but it is still not theirs. When it comes to the money aspect of business, no one can control how much they make, but they can control how much they spend. Business owners who put themselves at the top of the money tree, typically find unpaid bills.

There are many more mistakes that small business owners make, but these are the most common. When thinking about opening a small business you should remember this. A small business is like a duck floating across the water. All anyone sees is the graceful nature to which it moves. The successful small business owner is the bottom half of the duck, legs and feet paddling like crazy so that it moves gracefully above the water.

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