Eloquence is my middle name!!! :) Thanks Phil.

Thanks everyone. Those are great comments Jeanne. Something else that start-up owners forget is to pay themselves first as if they were employees. That means including your salary into your business plan. And, remember, in a financial crisis or not, CASH IS KING! However, today more than ever, question every purchase you make! As for spending a business loan on personal needs...well, who knows the situation that person faced?

Jean-Pierre

Thank you Mary.

You're right Li. Thanks for the input.

Piper, yes a very fine line which, regrettably, many start-ups cross too easily.

Thank Li.

Nike: Money is not the end all, be all. While it not wise to be penny wise (!), and pound foolish, the opposite is not any wiser. Here's a place where common sense is imperative. Does it make sense? What is the ROI? Few things are guaranteed in life, but you should have a good idea of what your spending (i.e., investment) will return. A lot of small businesses overspent on equipment. The latest laptop is not necessarily any more productive than an older PC, particularly if you already own this latter. Think wisely about where you are investing your capital, take the emotion out of the equation and follow your gut (it's your common sense if you eliminate your feelings).

Personal relationships are vital to any business. By establishing a personal relationship you stand a greater chance of a return customer, and of that customer spreading good will about your business. That's a great ROI. In fact, the greatest. That's another area where small (and very large) businesses fail. When's the last time you send a thank you card to a customer? Or saw an article that would be of interest, clipped and mailed it (or send the URL via email)? When's the last time you asked a customer how s/he was doing, and really listened? Wouldn't you be more likely to do business with someone you liked and trusted than a stranger. Of course, that being said, your services/products must also be up to the standards the customer expects.

A lot of statistics can be made to support a lot of theories. My personal favorite (and I love statistics) is: If 1 woman can give birth in 9 months, statistically 9 women could give birth in 1 month!!! Still, most "experts" agree on the SBA data. Some business do fail regardless of the product or service offered. Sometime they are ahead of their time. Who remembers that back in the 60s AT&T offered a phone with a screen where you could see the caller (called the Videophone)? It didn't sell. The reasons are many, but today we are surprised when we speak to someone over the Net - VOIP - and don't see the other person. Some just didn't work out regardless of the market research that showed otherwise. Who remembers the Edsel, a Ford product which market research showed should have been a huge seller? Again, the reasons it failed are many, but data showed it should have been a success. And on, and on. In 2005, a new product was marketed every 3 minutes (yes, minutes)!!! Few made it past the first few weeks, or months. And don't get me started on TV shows. In the end, the success of a company is good people, good planning, sufficient capital, a product/service customers want (or a demand you can create) and excellent customer service (though some companies can make do for a while without...let's all think Dell).

Hope it helps.

Jean-Pierre

I am overwhelmed with all of your kind comments. And the fact that some of you are using this in your practices truly makes my day! Thank you to one and all. I truly am at a loss for words (and that's not easy given that I used to be a litigator!).

Jean-Pierre

PS Next up: Planning to fail, by failing to plan: the ABCs of a business plan.

Thank you all for your kind comments.

Those are very kind remarks, thank you. I'm glad to see that my article was useful.

Thank you Dan for the use of "Fantastic" when describing my article.

Good luck Kerry.

Thank you Pam, and I agree that one needs an effective team. There are, of course, many more reasons why small businesses fail. I tried to capture the top 10 (with a bonus) from the statistics provided by the SBA. It is difficult for most of use to admit that we don't know something. Yet, when we do, it opens the door to surrounding oneself with all kinds of people who do know and are eager to help. Some will help for a fee, some not. In the case of the former, make sure you pick wisely.

Thank you Pamela for proving Pam's point.

Thank you Rebecca. WOW...53,000 (thousand!!!) less realtors!!! It looks like you're one of the few who did plan and set aside a rainy day fund (no pun intended relative to where we live). Best of luck.

Watch for Part II to this article within the next few days, where I will posit that most of us bear some responsibility for today's financial "crisis".

I completely agreed Kelleen and, interestingly, in re-reading my article prior to reading your post, changed the conclusion to include all of us. In fact, I've been toying with the idea of an article which examines our own actions and inactions in this crisis. For example, we are now calling for retribution against all those "greedy" CEOs and demanding a return of their "exhorbitant" pay and/or severance packages. However, few us expressed reprimands or called for changes to the system when the market appeared to be on an ever-increasing trend. Yet, these same CEOs were being compensated in the same way and while there were a few voices of discontent, for the most part we were only to happy to go along with the flow (so to speak), so long as we received our piece of the seemingly ever-increasing financial pie (with profound excuses for my analogies and metaphors).

Thank you for calling it as you see it Kelleen. That is showing integrity!

Jean-Pierre

Thanks everyone. I'm glad my article may have a positive impact. Remember, it's all up to us.

Thank you.