A lot of things can caused a failure in business such as, poor business planning and analysis. Unfavorable government policies. inadequate finding. Set up a business in a wrong location. Production of substandard products. Natural occurrences such as flood or pandemic and embezzlement by the employees.
Why many people fail in business could be attributed to so many reasons but there is one thing I believe strongly that even if all the so called factors we think are most important are put in place, one can still fail if such individual don't put getting to understand the business as part of the planning. You need to have the full understanding of the said business how it works where you see it then compare the circumstances in your location with the circumstances over there then draw your mode of operations.
anil02
Verified member
Improper planning is main cause of failure in business. In includes survey about market, availability of raw material and labor. Most of time when we plan for business we see only paper work but not real situation. So to success in business before starting we need to do proper research and if we feels than we must have some practical training
Highflyer
New member
So many businesses fail due to many factors, either internal or external. External factors are what business owners have little or no control on like fluctuations in prices of goods, bad economy, etc. Many business owners fail to seek for mentorship and advice when starting a business, and this leads to failure. Business owners should ensure they have a well written business plan or strategy to follow in the course of their business.
There are a lot of reasons why there is failure in business one of the first reason is the lack of proper business management when you don't have proper management for your business your business will fail because you have to monitor the growth and activity of the business well. Business plan is another issue you have to make sure you have a good business plan for your business because business plan will help the timing the success rate and growth of the business too and you also make you to know where you're spending your money
Doradorwa
Opportunity seeker
So many factors can cause business failure but the most common one is the lack proper budgeting of the business owner... Not been able to cut down cost when things are not going well... Lack of proper market survey... You don't just go into a business because it's going well for some people it might not go well you .
One of the common mistakes entrepreneurs especially the newbies make is lack of proper planning as mention in the post, planning involves the business plan. Without proper and well detailed business plan, the business may not really reach its peak because proper preparation prevents poor performance.
Shigobad2020
Active member
There are many causes of failure but i will mention three out of it, one is weak leadership whereby the owner did not have the zeal and strength to manage the company , the second one is poor money management whereby the management of the company spend money anyhow on things that doesn't count, and lastly bad planning and lack of strategy.
Mataracy
VIP Contributor
The causes of business failure is many but I will also mention some too.
(1) One of the cause is lack of management: When a business man did not know how to manage e.g by browsing to finance business all the time.
(2) Selling of goods on credit every time can run the business down.
(3) Lack of how to address customers.
(4) when the shop is not at the centre where customers can access
(5) Lack of enough capital to finance the business.
All these things can cause business failure.
(1) One of the cause is lack of management: When a business man did not know how to manage e.g by browsing to finance business all the time.
(2) Selling of goods on credit every time can run the business down.
(3) Lack of how to address customers.
(4) when the shop is not at the centre where customers can access
(5) Lack of enough capital to finance the business.
All these things can cause business failure.
Sammyesx
Active member
Many businesses are plague with failure, to solve these issues, one has to know the cause of the problem in other to solve the it.
Here are 5 common things that many business owners don’t know that forces them out of business:
1. They don’t know how to plan.
Lack of planning is when you ignore the value of planning and don’t bother to learn the methodology of planning. A good plan should include both short- and long-term goals as well as a way to measure goals and results. It should also have clear to-do lists, benchmarks, and milestones.
2. They don’t know how to provide leadership.
Leadership is about motivation and inspiring the troops with a bold vision. It starts with building rapport by helping people fulfill their aspirations within the company. Leadership is essential; without it, it’s hard to make good decisions or take effective actions. Leadership affects every aspect of a business, from how productively employees work to how operations are organized.
3. They don’t know how to manage people.
Failing to manage people arises from failure to listen to suggestions or complaints, micromanaging, and providing harsh criticism under the guise of constructive feedback. This not only lowers employee morale, but it also lowers productivity and teamwork.
4. They don’t know how to market.
Marketing doesn’t start with learning how to use advertising and promotional strategies. It starts with product differentiation. Unless a company can clearly state why their product is different from others similar to it in the marketplace or come up with a unique value proposition, all its marketing efforts will be wasted.
5. They don’t know how to win customers over.
There is no point in improving lead generation if a business doesn’t know its customers well or treat them well. Winning customers over starts with understanding consumer desires and tailoring products to meet those wants and needs. Treating customers well starts by following best practices when it comes to customer service.
What you don’t know you don’t know can trip you up the first time you start a business, but by learning what you missed the first time, you will increase your likelihood of success when you try again.
Here are 5 common things that many business owners don’t know that forces them out of business:
1. They don’t know how to plan.
Lack of planning is when you ignore the value of planning and don’t bother to learn the methodology of planning. A good plan should include both short- and long-term goals as well as a way to measure goals and results. It should also have clear to-do lists, benchmarks, and milestones.
2. They don’t know how to provide leadership.
Leadership is about motivation and inspiring the troops with a bold vision. It starts with building rapport by helping people fulfill their aspirations within the company. Leadership is essential; without it, it’s hard to make good decisions or take effective actions. Leadership affects every aspect of a business, from how productively employees work to how operations are organized.
3. They don’t know how to manage people.
Failing to manage people arises from failure to listen to suggestions or complaints, micromanaging, and providing harsh criticism under the guise of constructive feedback. This not only lowers employee morale, but it also lowers productivity and teamwork.
4. They don’t know how to market.
Marketing doesn’t start with learning how to use advertising and promotional strategies. It starts with product differentiation. Unless a company can clearly state why their product is different from others similar to it in the marketplace or come up with a unique value proposition, all its marketing efforts will be wasted.
5. They don’t know how to win customers over.
There is no point in improving lead generation if a business doesn’t know its customers well or treat them well. Winning customers over starts with understanding consumer desires and tailoring products to meet those wants and needs. Treating customers well starts by following best practices when it comes to customer service.
What you don’t know you don’t know can trip you up the first time you start a business, but by learning what you missed the first time, you will increase your likelihood of success when you try again.
Asad Ali
Active member
Chibson
VIP Contributor
There are many things that causes failure in business. Anyone who wants to go into any business should make enough research and of course she could opinion of those who has been into the business for a while. one major cause of business failure is lack of proper plan and business arrangement. Another factor is lack of financial backup.
marcusfe
Active member
He !most common causes of failure in business is the lack of proper plan. It is often said that failure to plan is planning to fail. If an organization fail to plan for the present and future there is a high tendency that the business will fail. There are many unexpected occurrences that may happen to the business, if the business failed to plan for all of these it may result to the collapse of the business.
Alexandoy
VIP Contributor
To be frank, there are many causes of failure not only in business but in life itself. With business the most common reason for failure is the lack of revenue to mean there is a loss of customers. One rare cause of bankruptcy is sickness by the owner who just decides to close shop. That happens although as I said it is rare.
btaliat
VIP Contributor
The poster has listed the real cause of failure in business. However another things I want to add is the inability of business owner to take cognizance of the customer feedback. Most business owners don't even value the feedback from their customers. This can also cause failure because many customers will leave if there opinion is not respected.
Haypril
Active member
I totally agree with the points you have been able to gathered concerning failure in business. However, I also believe there are some natural phenomenon affecting businesses all over the world. These days most business owner feel reluctant to ask questions and make findings before choosing a location or starting up a business plan.
Olajidey
Active member
There are many factors that can causes failure in business but the most especislly the most factor that really affect the failure of business it the bussinees plan, if your business plan fail to adress the most important factors in business it will result to failure of business, another thing is financil capability.
