Entrepreneurs

‘Shark Tank’ investor Robert Herjavec: 10 reasons why most businesses fail

Robert Herjavec from 'Shark Tank'
Ilya S. Savenok | Getty Images
Robert Herjavec from 'Shark Tank'

Most start-ups fail, and "Shark Tank" judge and business icon Robert Herjavec says there are 10 main reasons why.

Before starting his information technology empire, Herjavec forged his own road to success — working at restaurants, delivering newspapers and even starting a business from his basement. So naturally, he's learned a thing or two about what not to do.

In his recently published book, "You Don't Have to be a Shark: Creating Your Own Success," Herjavec shared the biggest mistakes start-ups make. We've summarized them below.

1. Undercapitalization

Not enough money to start your business could tank even the smartest idea.

2. Lack of industry experience

Entrepreneurs need to have a good grasp of the industry they're looking to break into.

3. Lack of management experience

Failing to understand the ins and outs of leading a team could spell trouble.

4. Poor record keeping

"Not knowing where the money is going" is a big mistake, he says.

Entrepreneur running a business
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5. Ineffective planning

"Seat-of-the-pants decision making can take you only so far," he writes.

6. Poor staffing

Forget family and friends when hiring — unless they're truly qualified. "Your brother-in-law may not be your best choice as office manager," he writes.

7. Bad timing

Even this millionaire knows you can't control everything when it comes to your start-up. Sometimes, the timing just isn't right.

8. Economic conditions

"Jumping into a down market without the ability to take advantage of it" is a recipe for disaster, Herjavec says.

9. Personality

Successful entrepreneurs have a healthy dose of energy and wisdom.

10. Lack of supportive qualified partners

"You may not be able to do it all," Herjavec says.

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."