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Sure path to business failure
It's hard to start a business, but yours can crumble quickly without enough cash and market sense.
Focus on careers

5 ways to crash your small business

Millions of workers dream of starting their own business, but the odds of being successful are daunting enough to keep most hopefuls on the sidelines.

For those who do go into business for themselves, without a background in business, it can be a steep learning curve.

But hope springs eternal. According to the Small Business Administration, or SBA, 637,100 small businesses with employees were opened in 2007. Based on its research, the SBA estimates that two-thirds of new establishments will survive two years; only 44 percent will survive four years. The survival rate plummets to 31 percent when the life of the business reaches seven years.

Although small businesses can crash and burn for many reasons, avoiding some of these common mistakes can help your small business beat the odds.

How to run your business into the ground
Limit your understanding of the business
Check your elevator pitch. As a small-business owner, if you can't sum up your business in about two minutes, stating concisely what you do and why your business exists, you might have problems.

"You need to be able to articulate very clearly, and in what I call a very compelling manner, what you offer, why it is of benefit and why it is different from what is out there. If you can do that, you probably understand what you are doing," says Fred Glave, a Washington, D.C.-based counselor with SCORE, a free consulting service to small-business owners and entrepreneurs.

When small-business owners don't understand what they're doing, why they're doing it and how they differentiate their businesses from everyone else, it can be difficult to keep the business going when times get tough.

When things are going well, it can be too easy to lose sight of what is working if the person in charge doesn't understand what's driving his or her success.

Whether it's great service, reliability or a unique product that works, knowing the business backward and forward will help owners grow and sustain the business in good times and bad.

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-- Posted: March 30, 2008
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