If you have a "normal" small business, you'll be striving to maintain the continuity of your cashflow by maintaining the day-to-day integrity of your business.

That's what "normal" (meaning "the majority of") small businesses do. And that's why you'll be far more likely to lose your cashflow than to keep it! Why? Because, from historical evidence, the vast majority of small businesses fail - and the vast majority of those that fail do so because of failing cashflow!!!!

Graph Source: "Small Business Failure Rates" (1973-1990) W. Reynolds, W. Savage and A. Williams - Your Own Business, A Practical Guide to Success - 1994, p38

The Penalty for Being "Normal" in Small Business!
Caroline Jordan, divides small businesses into two "Clubs". The first is the "20% Club" whose members will succeed and flourish. The second is the "80% Club". These are business owners whose businesses will fail. Most likely within the first 5 - 10 years.
"How to Avoid the Most Common Reasons for Small Business Failure" - Mastering Cashflow; Jan. 2006

Dunn & Bradstreet suggest that some 85% of those businesses that do fail will do so in the first 5 years, and the Australian Government's Productivity Commission cites ABS data showing 53% of business failures occur within the first 3 years - and 90% within the first 10 years!

Some businesses, such as Restaurants, experience the 80-20 effect in the shorter time of just 2 years!
ADC Info No.24; October 1998; "Planning Against A Business Failure"; R. Holland:

"The overwhelming majority of business fail, and of those that endure the overwhelming majority either just provide a job for their owner or cause their owner to become a slave. If you think that it takes 'common sense' to run a business you're wrong - it takes 'uncommon sense'."
Richard Schefren; Strategic Profits; Oct 2006

Hale, cites Michael Tentowski, Director of the Dan River Small Business Development Corporation as stating “that around 95% of Small Businesses will fail within 5 years.”
“Gambling on Small Business”; Feb 2004,

Bickerdyke, Lattimore and Madge, in an article written for the Australian Productivity Commission, (Jan 2006) state "Most businesses fail within the first five years, and those who survive the first five are often losing money. Pursuing a career in small business ownership seems like a fool’s footpath straight to failure and poverty."

"Within 5 years more than 80% of them (start-up businesses) will have failed. Most small businesses are in a state of internal war - a war that no one can win. Day after day, fighting the same battles, in exactly the same way you fought them the day before. Most small business start with a dream and end in fear, confusion, and desperation because how to achieve their goals is not understood."
Michael Gerber; The E Myth Revisited, 1995.

Jessie Hagen of the U.S. Bank suggests around 82% of business failures are due to poor cash flow management skills, a lack of understanding of the factors influencing cash flow, and inaction in seeking help from those who do!"
US Bank Green Paper, Oct: 2004

Brett Chamberlain from "Talking Business" fame, is of the opinion that around 68% of businesses that fail do so simply because of lack of cash-flow!
Chamberlain Business Development Corp.: 2004

People who have made a detailed study of Customer Loyalty and its impact on a business (for example, The Harvard Business School, Reichheld, Malouf, and others), suggest that just a 5% increase in Customer Loyalty can increase your profitability from between 25 to 125%! "The generation of Repeat Trade and Customer Loyalty can literally transform the viability of your business! It can also "single-handedly" save you from the most destructive force experienced by small business - poor cashflow!"

The world of business is forever changing and evolving. Consumers are now much more sophisticated and demanding as they realise the value of their trade. And the larger the spender a given customer the more likely they are to be more aware - and the much more likely they will be lost to a more aware competitor ...
Forrester Research Newsletter; April 2006

So it's rapidly becoming critical that as a business owner you must become aware of issues outside your business. And you must become aware of issues which build quality customer loyalty in your clients.
The Advanced Mobile Services User Paradox - Advanced Users Are Satisfied — But Disloyal; van Veen, de Lussanet, Menke , and Carini; December 14, 2005

"According to Dun & Bradstreet reports, “Businesses with fewer than 20 employees have only a 37% chance of surviving four years and only a 9% chance of surviving 10 years. Restaurants only have a 20% chance of surviving 2 years. Of these failed business, only 10% of them close involuntarily due to bankruptcy and the remaining 90% close because the business was not successful, did not provide the level of income desired or was too much work for their rewards."
OADC Info #24; October 1998; Planning Against A Business Failure; Rob Holland:

"23% of Canadian small businesses fail in their first year and 22% fail in their second year, which means that 45% of the small businesses started in this country don't survive more than two years."
Small Business Info - Canada; Jan 2006; Thinking Of Starting A Small Business?; Susan Ward, Your Guide to Small Business:

"About 60 percent of all businesses fail within the first two years and for certain industries, such as the restaurant industry, the failure rate is even higher. Although chances for business failure diminish as time passes, most businesses are never safe. Competition and changing market conditions ensure that the struggle for success never ends."
MasterCard Business: Jan 2006 -  Common reasons for business failure.

"The life cycle of the typical small business is short and painful. It starts out with a dream and ends with a whimper. And in between, a struggle of Herculean proportions is played out as the owner tries to figure out why the business isn’t succeeding."
How to Avoid the Most Common Reasons for Small Business Failure; Jan 2006; Caroline Jordan

"Small business failure wrecks havoc on our economy and society. Just think about how many bank accounts and life savings are wiped out via the carnage of dying businesses. How many families are torn up? How many health problems result? Literally, how many lives are lost?

What is the net cost to society as a result of the problem? And finally, what are we doing about this tragedy?"
Lowering the Rate of Small Business Failure; Part One - Saving Our National Treasures; Nicholas A. Bibby, 2008

Editorial Note:
Despite all of the arguments regarding the accuracy of small business failure statistics and the power of modern mathematical statistical analysis to find the truth, what we are finally dealing with is the lives of people.

People and families. Human lives. Personal success or failure - not maths!

Whether the National Average Business Failure rate is 4% (Victorian State Gov. "Small Business in Victoria" Sept, 2006) or more like 90%, plain common sense and personal observation dictates that, in human terms, a stated 4% is just patently absurd, whilst the 90% is probably high by way of average but very possible in some regional areas.

Of all of the papers examined by us, that written by Rolffe Peacock, ["Failure and Assistance of Small Firms"; 2000: Understanding Small Business] to us, is an absolute "stand-out" for its level of common sense and its use of science in support and guidance of human activity and aspirations.

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