Jeff Cornwall quotes bankruptcy lawyer Bobby Guy:
10. Over-expansion. The need to get there first or to demonstrate revenue growth to anxious investors leads businesses to grow too fast.
9. Poor Capital Structure. Companies take on too much debt....Enough said!
8. Failure to Control the Controllable Costs. Businesses spend down the initial cash before it is flowing in at a positive rate.
7. Failure to Prepare for Volatility of Uncontrollable Costs. For example, energy, materials, labor, or insurance.
6. Add New Products or Divisions that Drag Down the Profitable Ones
5. Poor Internal Controls and Execution -- customer service, accounting controls, theft, fraud
4. Poorly Designed Business Model
3. Reliance on Critical Financing that Dries Up
2. Failure to Adapt to a Changing Market
AND THE #1 REASON? Management in Complete Denial......
Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.