Stumbled on a stat about failed businesses that caught me off guard

I was reading some old trade journal from 2019 my dad left on the coffee table, and I saw this stat that said nearly 60% of small businesses that fail do so because of cash flow problems, not because the idea was bad. That hit me hard because when I lost my landscaping company back in 2017, I kept thinking the concept was broken. Turns out I just couldn't manage the timing between paying my crew and getting paid by clients. I remember one job for a big house in Oak Park where I had to front $800 for materials and waited almost 90 days to get reimbursed. That single contract basically sunk me. Where do you find stuff like that? Has anyone else dug up data that made them rethink their own failure?

3 comments

3 Comments

joel_clark371mo agoMost Upvoted

Cash flow killed my shop too. Track every single dollar coming in before spending it.

ray_martinez821mo ago

Yeah "Track every single dollar" sounds simple but man is it brutal when you're in the thick of it. I had a buddy who ran a sign shop and he tracked everything with a whiteboard in his office. One day he realized he was spending $40 a week on coffee for clients that never led to a sale. That little leak added up to like $2,000 a year just on bad coffee meetings. But the real killer was he found out he was paying his supplier 2% more than he needed to because he never shopped around. That single change saved him enough to keep the lights on through a slow summer. Have you ever gone back and looked at all the tiny expenses that added up?

uma_williams1mo ago

Jumping off what @joel_clark37 said about tracking, I noticed the same pattern with my brother's food truck. He was bleeding cash on paying a premium for those fancy compostable containers when plain ones worked just fine and cost half as much.