Backruptcy Doesn’t Stop Most Entrepreneurs

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September 9, 2004 by Dane Carlson | 0 Comments

Twenty five percent of entrepreneurs whose companies have gone backrupt plan to immediately start another business, according to an SBA sponsored study.

Business Week reports on more of the survery results and implications:

George Cloutier, whose Waltham (Mass.) American Management Services counsels about 500 on-the-skids businesses annually, says entrepreneurs’ excessive optimism can take the form of denial. One result: Finances don’t get enough attention.

Indeed, while undercapitalization historically has been cited as the leading reason for business failure, turnaround experts now lay the blame more on poor financial habits than on a simple lack of cash. “If I ask 100 small-business owners how many of them do monthly financial statements, 90 of them will not raise their hands,” says Gene Fairbrother, president of MBA Consulting in Coppell, Tex. Entrepreneurs also get into trouble by obsessing over sales rather than learning to operate efficiently and improve margins. The fix might be as simple as installing a controller to cut costs, increase prices, and hound deadbeat customers.