BUSINESS FAILURE


Business failure, or colloquially going out of business, refers to a company ceasing its operations following its inability to make a profit or to bring in enough revenue to cover its expenses.
The final step is always that the business runs out of cash. It has been said that running out of cash defines business failure.

CAUSE OF BUSINESS FAILURE

  Both Managerial deficiencies and Personal characteristics can lead to business failure.

  Below are some person characteristics and managerial deficiencies that lead to failure.

 A. PERSONAL CHARACTERISTICS

1. Exaggerated opinion of businesses competence based upon knowledge of some skills.
2. Limited formal education entrepreneurship Ed.).
3. Inflexible to change and not innovative.
4. Uses own personal taste and opinion as a standard to follow.
5. Decision based on intuition, emotion and non objective factors.
6. past not future oriented
7. Little reading in literature associated with business.
8. Resistant to advice from qualified sources but accepts it from the least qualified.

 B. MANAGERIAL DEFICIENCIES.

1. Can not identify target market
2. Can not locate trading area
3. Can not delegate
4. Believes advertising is an expense not an investment.
5. Only rudimentary knowledge of pricing strategy.
6. Immature understanding of distribution channels.
7. Not planning
8. Can not motivate


Also shortage of working Capital, stiff competition, and poor government support

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