The cause of failures in business not always easy to pinpoint. Many people are not equipped to manage businesses, or not suited to manage the type of business they have chosen. An occasional review of the danger areas for the owner-manager is helpful, even for a healthy, established business enterprise. Inadequate records have been nominated by many analysts as the number 1 culprit in the lexicon of business failures. Failure to keep the records that are needed to guide management in decision making can be fatal. A case in point was a company with an excellent product and an up to date, modern plant that felt it was unnecessary to waste money and space on record keeping. Business was good. Orders kept piling up and customer telephone calls, in the absence of records, kept them informed that they had more business than they could handle. And then they went broke. They had been selling their product for far less than it cost them to make it! Over reaching is another hazard. The sole proprietor who succeeds as long as the business is small enough to be under his direct control may fail when the tries to expand. Over reaching has another aspect. The wise man prepares well in advance for an increase in business. When he begins to translate his plans into action, the business should be there to support the increase in his expenditures. Your greatest risk is your out of pocket cost for men and material. Get that back first in a prepayment from your poor credit risk customer. Your next risk is overhead. You have it whether you sell to this particular customer or not, but if you recover overhead you will break even whether or not he pays you anything more. While you can and should expect to make a profit, you can afford to wait a little for it, so that will constitute the last payment. This is not an enumeration of all factors which can enter into business failures, but is merely an attempt to stimulate you to take a look at your own business from a different point of view, to help lessen your risk of failure. The owner has to work at being an owner- he doesn't get something for nothing. He must plan, organize, coordinate, and look ahead.