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Rhea Mae A. Ilar BUSN 120 Professor Rick Miller 14- Oct. - 2010 Why do businesses fail' Ironically, Business Owners didn't take the time to learn why most businesses fail before they ventured into starting a business. We have common pitfalls that leads to business malfunction and failures. Small businesses fail at an alarming rate in the U.S. Each Day, hundreds of small businesses close their doors because they weren't able to effectively blend the many elements need for success. Unfortunately, many of these could have succeeded if they had only avoided the top six pitfalls that commonly plague struggling companies. These pitfalls included 6 pitfalls. First is Lack of Planning, Successful small businesses don't just happen. They are result of International well- executed business plans. Many entrepreneurs are so eager to get started that they neglect business planning and jump in headfirst with little more than a dream and an idea. That might cut in some arenas. Secondly, Inadequate Funding is another common reason for small business failure is a lack of adequate funding, especially during the critical start-up period. It severely limits your capacity and threatens your ability to grow beyond the initial stage of life. Third is Bad Marketing, It's possible to create a business that sells the best product at the best price and still fail because no one knows it exists. Getting the word out of becoming the thriving venture you think it can be. Fourthly is having Unreliable Workers, you can't sell what you don't have. Your ability to maintain proper levels of inventory is directly proportional to the quality of your relationships with reliable suppliers. Developing effective supply channels can take a little time, but if you are having problems with you current suppliers don't cross fingers and hope things will get better. Fifthly is Staffing Imbalance, Labor is the biggest expense for most small businesses. Therefore, it only makes sense that it's worth your time to make sure that your company is employs the right amount of people. Sixth is Ineffective sales performance, Sales are key elements in the success of any business. Poor sales, in other hand, are an indication that your business might be in jeopardy. Maintain a close eye on sales patterns and trends, and hire the best sales staff you can afford to keep the money rolling in and for the company rolling on. Last and mainly is the common reason why businesses fail are caused by Government Regulations. These regulations are small-business owners often complain bitterly about excessive government regulation and red tape. Paper works costs alone account for billions of small-business dollars each year.