Why do business fail?
Businesses can fail despite all the hard work, capital and expertise
This can happen to businesses from any size
Lack of long-term funding
A business can ran out of money once it gets started
Because they underestimate ow much money they need to attract customers
General costs are very hard to estimate
Initial errors
Start-up businesses can make mistakes early on and are hard to solve
Especially when they have spend its start-up cash
Other businesses can’t also make mistakes
Lack of management skills
Businesses can fail because of manager’s poor decisions
They make the more important decisions
No reputation
Establishing a reputation can be hard for a business
Even more if the market has already well-known brands
This causes businesses to fail
Businesses with a strong reputation can lose it by making errors
Market conditions
Some markets are harder to enter than others
The business environment causes problems for the business
It changes from a boom to a recession causing people tot spend less money
Because of this orders and income can be lose
The economy
All size businesses during a recession fail due to the lack of a customer spending
This causes a reduction in the business’ revenue
Large competitors
Small businesses can be squeezed out of the market
As businesses grow because they can’t afford to invest more