While 400,000 new businesses are being created annually, 470,000 are closing, leaving a deficit of 70,000, according to the U.S. Census Bureau. Not all business exits are failuressometimes an owner gets a job or retiresbut some of them undoubtedly are. And often it’s because the owners got blindsided by factors they did not anticipate. “A lot of companies fail unexpectedly,” said attorney Andrew Sherman, a partner at Jones Day in Washington, D.C., who advises businesses on issues affecting growth and strategy. “They fail by surprise; they don’t have any safety belt.” The good news? “A lot of risks can be averted, but only if you plan for them,” Sherman said. The first step in learning to avoid business failure is understanding what is likely to cause it.
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