Numerous studies have estimated that a majority of new businesses close within the first three years. These same studies give clues to why companies fail. We know that company owners are highly motivated to succeed and are willing to work long hours. We also know many owners have set very specific goals to reach. So why do companies fail?

The basic reasons are inadequate knowledge, planning, and money. Being motivated, working hard, and setting goals are not enough. In fact, working hard may not even be necessary in some businesses. Here are some important things to remember to improve the chances for success.

· Understand how much you need to know about the product or technical aspects of the business you are entering. "Technical" is used in its broadest sense. For example, the technical aspects of a restaurant business would be such things as food and drink management, preparation, and serving. It would also include knowing about room layouts and table settings as well as potential sources for products, supplies, and equipment.

· Understand how much you need to know about the business side and record keeping. This need will vary; some businesses require little, while others require more.

· Make sure you understand whom your typical customers are. The demographics such as what they buy regularly, what part of town they live in, and how much they spend on certain goods and services.

· Take steps to ensure potential customers will know about your business and can easily reach it. This could involve two critical factors: promoting your business and your business location.

Promoting your business will tell people about your business and what you are offering.

Location can be an important way for people to become aware of your business. A good location also makes it easy for customers to get to your business place. While location is critical for some businesses, it may not be a factor for others. With the limited budget of a small business, you will have to work around possible problems with location.

· Plan ahead. Spend time anticipating what might happen and how you would cope with situations, good and bad. Either type of situation could be a problem later on.

A key point to remember is that you do not have to be an expert in all these areas - just reasonably knowledgeable. On the other hand, being seriously deficient in one area could ruin your chances at success. Do not allow negative words from pessimistic people or endless streams of government red tape discourage your venture. Continue and build your business and one day soon the fruits of your labor will come forth.