How Due Diligence, Having Business Documents in Order and Management’s Willingness to Look Outside the Company for Assistance Can Minimize Some of the Major Inherent Causes of Business Failure


The following problems appear to be some of the more common causes for business failures facing an independent business person or franchisee:

  • Lack of Execution
  • Financial Neglect
  • Lack of Capital
  • No Business Plan

These problems and many more facing the business person result in the following figures compiled by Experian Information Solutions, Inc.

Of ten (10) new businesses:

  • after 2 years, 7 are still in business
  • after 6 years, 5 are still in business
  • after 10 years, 3 are still in business
  • after 15 years, 2 are still in business

Besides the business owners, if the business is a franchise, the franchisor has a “vested interest” in the success of the business.  Like the business owner, the franchisor has invested time and effort into qualifying the franchisee to have the Fashionable handbags perspective franchise applicant fail to get financed because of an inadequate, or content information due diligence would have covered in the presentation to the lender is a cost to the franchisor.

The application of certain principals can increase the probability of a successful start to a business and its continued success.