Another common reason small businesses fail involves the lack of business acumen held by a management team or business owner. In some instances, a business owner is the only senior-level personnel within a company, especially when a business is in its first year or two of operation. While a business owner may have the skills necessary to create and sell a viable product or service, he is often lacking the attributes of a strong manager and the time required to successfully manage other employees. Without a dedicated management team, a business owner has greater potential to mismanage certain aspects of the business, whether it is finances, hiring, or marketing.
Smart business owners outsource the activities they do not perform well or have little time to successfully carry through. A strong management team is one of the first additions a small business needs to make to continue operations well into the future. It is important for business owners to feel comfortable with the level of understanding each manager has regarding the business operations, its current and future employees, and the products or services the business provides.