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Causes of businesses fails - Coggle Diagram
Causes of businesses fails
Lack of long term-funding
A business may run out of money once get started, this is because new businesses often underestimate how much they need to spend to attract customers with costs of...
Advertising.
Running offices or shops.
Paying staff wages.
Making up for production mistakes .
Initial errors
Start-up businesses make mistakes early on that can cause failure. These mistakes often are hard to solve, especially when the business has spent its start-up cash. Even existing businesses can make errors later on.
Lack of management skills
Businesses can fail because of poor decisions of managers. Managers make important decisions, like...
Choose the wrong product.
Pricing method.
Market to sell in.
No reputation
Establishing a reputation can be hard for a business. If a market has a well-known brands, start-up businesses may fail.
Market conditions
Some markets are harder to enter than others. The business environment can cause problems for a business. As it changes from a boom to recession, people will spend less money. This causes the business to lose orders and income.
Large competitors
Smaller businesses can often be squeezed out of the market. This because larger businesses can often afford to invest in developing new products, reducing prices or using advertising campaigns.
The economy
During recessions, many businesses of all sizes fail, due to lack of customers spending, which causes a reduction in business's revenue.