Of all the small businesses that fail, only 10% go bankrupt. The other 90% made a conscious decision to close their doors. Most just threw in the towel. What caused such a high rate to give up? 50% of the reasons are financial management related. Here are some examples:
- Chronically tight cash flow produced great amounts of stress.
- The amount of profit earned was not worth the amount of time put in.
- The owner had little idea the business was doing so poorly until it was too late.
A study done by Dunn & Bradstreet concluded that if business owners did only one thing they could improve from a 90% failure rate (during their first four years of business) to a 90% success rate (they’re still in business). That one thing is to hire professional help. Since 50% of the reasons why businesses go out of business are financial management related, it only makes sense to hire an outsourced CFO.
