WHY SMALL BUSINESS FAIL.

REASONS SMALL BUSINESS FAIL: AVOID THEM

It is the heart-beat of every business owner to succeed in business; nobody do subscribe for failure, yet people still experience failure in business, not intentional but certain things they do wrongly leads to failure. This text is to enable us discovered those things and avoids them. ‘There are no disasters in business that you can’t avoid if you see them coming and make adjustments- Boune T. Pickens Small. Below are the reasons for business failure:

1.     Lack of managerial strategy: a business is bound to fail when business owner lack managerial skill- anonymous. The term management is the process of planning, organizing, directing, staffing and controlling the limited resources of the firm in achieving the goals and aims of the firm. An entrepreneur that must succeed must be able to effectively handle these parameters as mention above.

2.     Wrong decision making: Decision is the act of choosing among likely

alternatives. Failure to gather information over a particular business idea can lead to failure in decision making in business. For instance if you want to decide which of the various alternate business idea you want to embark on, it is right to gather enough information with facts and figures over the alternates to know which one is best suited at the particular time and season.

3.     Failure to move with the trend and changing technology: every-day there is new ways of doing things-anonymous. Entrepreneurs must move with new trend of managing their business in terms of taste, style and innovation. forinstance, people prefer using online chatting to communicate to old way of making calls. So failure to move with the trend and changing technology can lead to failure as people prefer new taste of service that can save time and money to one that cost them more.

4.     Unfavorable government policies: failure in business can be as a result harsh policies of the government. It could fiscal, monetary or economic. For instance the treasury single account mop up fund in the economy for business. Even though entrepreneurs may not have control over some of these policies, but there is need to make adjustment to sail through even in harsh government policies. There is need for co-operative society of likeminded business owners to protect their interest amidst government policies.

5.     Wrong business location: most failures occur in business due to wrong location of business site. For instance establishing a bookshop in a brothel is a futility on arrival. Another is establishing a filling station in an inaccessible area is also a futility. A business man must have a feasibility study on his business environment to have a successful business outcome.

6.     Internal fraudulent Activities: most employees can be mischievous in their dealing, which can lead to failure in business. Their activities include illegal business transactions and siphoning which can be at the expense of the business, leading to liquidation. So business owner must keep eye on the activities of employees with respect to the business.

7.     Insufficient capital: even though it might not be the major, but to some extend insufficient fund can be a hindrance to success in business. Not only that, ineffective management of the limited fund can serve as a bottleneck to the success of the business.