Three reasons for business failure

[Sotherefore]

Business failures is now the most challenging factors for so many entrepreneurs . It is estimated that 65 percent of all businesses are not likely to survive the first 10 years after establishment. Generally there are so many causes of business failure which some of them would be discussed belows , This is to enlightenment entrepreneurs to understand what could possibly leads to unsuccessful business organization ,which are :

1) WRONG MINDSET:

This is likely the cause of most failures in a business organisation, it's not just about starting a business but as an entrepreneur you are to understand the main reason for which your business was established .

Business are successful base on what they offer to the masses. When a business owner don't know his or her responsibilities in a business, There is likely to be a high chance of failure.

3) GREED : This is popular in most people that are establishing a business. Business nowadays are highly competitive and when greeds takes over a business organisation, There's is likely to be an increase in the price of products or services higher than the market price. Buyers will obviously turns to where they could easily gets the same product at a cheaper price which may definitely decrease your chance of business success if you are selling at a high price.

3) BAD LOCATION: in whatever business we are establishing , location is always very important and must always be considered at all time . when business is located in a location with high demands on the product offered then There is higher probability of earning which also increase the chance of business success. Bad location In the other hands is likely to leads to low patronage which could negatively affect the progress of a business.

 

[Augusta]

Yes you have mention the three common factors that brings about business failure.Business failure can be very devastating for some people especially if you had use your saved money to start the business and it fails before it even get started it can be very frustrating and make one very depressed.

one very outstanding point is always the issue of wrong location when once you fail to locate your targeted audience you are really setting up your business for failure business needs a good amount of research on different areas before establishing it because if you don't do it the way you should you will find yourself regretting that actions for a very long time. so it is always good to make a research, consult with the professionals acquire some skills before attempting to start a business doing this will help you next time to have a successful business that will even outlived you.

 

[btaliat]

You have justifiably done very well to the some causes of business failure. I only need to emphasis your points and proffer solutions to those problems in order to prevent failure of businesses.

It is no doubt that many people don't really set objectives for their business whether before they start or even along the line of doing their business. They don't really have any direction which invariably causes the failure of the business. Then intending business owner and the existing ones should however set some realistic objectives while setting up their businesses.

It is not a doubt that business is organized truly for profit maximization. But a business man should not let greediness set in. When this happens, he tends to sell above the market price and will definitely lose customers. To avoid this, a business owner should know how to fix price in such a way that the prices will be affordable by the customers and won't be at his own expense.

A business owner that has chosen wrong location has already ruined the business even before he starts itm location will determine the success of every business. The only solution to this is to make sure there is market survey before setting up our business to choose a better location.

 

[Kingsley]

In fact there are so many reasons why a business will keep on failing in this part of the world and mostly in my country, I will classify them under two major category as the personal reasons and the general reasons.

The general reasons include those factors that can not be controlled by the entrepreneur themselves, they are external factors like inflation, when we look at the effect of inflation on businesses we will see clearly that bit has negatively affected so many businesses, many shops are closed down mostly the small and meduim scale businesses are worst hit by inflation. Business men and women has no choice other to live on loans as that is the only way for them to keep up with the high rise in the prices of goods and services. I have had a personal experience of this.

Again government policies has truly affected just like the Twitter ban that was placed by the government is greatly affected somany businesses negatively.

Then on the personal reasons this are the ones that are traceable to the entrepreneur themselves, they include lack of practical experience, lack of technical know how. And lack of enough funds to support the business.

 

[Rachael]

Business failure can be curbed although it cannot be completely eliminated. The business owners ought to take some key factors into consideration before setting up a business so it could yield productivity. The business plan should always have a realistic vision and mission. Some businesses are even set up without a proper business plan or no business plan at all. Some do not see the need to have a plan, and at times, they consider the plan insignificant for small businesses.


A business plan is a necessary equipment which is a guide to curb business mishap. It is serves s a reference point for the business growth and to the entrepreneur. A business would be prone to failure if there is no existence of a proper business plan, this is because, the business owner would not have a guiding force or drive. A business would be prone to failure if the business is not situated in a place that could possibly match the needs of the target or specific audience. Location matters a lot when it comes to setting up your business. In certain cases, a business owner should source for creative means through marketing and advertising in order to draw the attention of the audience. A business would be prone to failure if the owner has no sustainable plans and if he is not passion-driven.

 

[SafeInvestments]

Not enough tenacity is my bet. Fail and fail and try again even if it's for 10 years!!

 

[Chibson]

Sometimes many people venture into different businesses thinking that because they have enough capital that means they would succeed in such a business but after sometime they would realise that the reverse is probably the case. There are a lot of things that makes people not to succeed in business and some of them can be caused by them and some by the government or their immediate environment in which they are located. If you really want to succeed in a business it is very much important you try as much as possible to locate your business in a place that is favorable and at the same time the government policy in that location is also very favorable to your business. Location is one of the most determinant factors when it comes to business success, this is why it is very important you must try as much as possible to get a very good location for your business.
Wrong mindset is also another factor that affects many businesses. If you are venturing into a business you must try as much as possible to have the right mindset if not you may be heading to business failure.
Government policies is also another factor that makes many businesses to fail. When the populations of government in a particular geographical location is not favorable to businesses then there will be a massive business failure in that country

 

[Good-Guy]

I would say that mindset is one of those things that play a very big role when it comes to success because mindset is one of those things that is responsible for willpower and when people have more willpower, they work harder. When people work harder and diligently, they tend to become successful. Greed is one of the biggest reasons why many people often become unsuccessful. I have myself seen many people suffering due to greed. Greed is a weapon which is used by scammers to lure people and when people get lured, they chances of them getting scammed is much higher.

Apart from all this, I must say that not preparing and applying the right kind of money making strategy is one of the biggest causes of losses. In order to become a good businessman, you must become a good strategist because it is simply not possible to become a good businessmen with having the right kind of skills to develop the business strategy. Apart from that, there are many other reasons why businesses might fail and one of them is the insufficient amount of funds. The more funds you have, the better you will be at dealing with recovering from loss.

 

[eldavis]

Another reason for most business failures today is lack of proper training. There are most persons today, they start up a particular business not cause they have the passion for it or even cause they want to do it, they simply go into it because they have seen others doing it and making profit from it, so they assume it's that easy. They rush into the business without having any proper plan or training as to how to run the business

 

[General01]

I love how you explained greed, wrong mindset and wrong location as one of the common reasons why some business fail.

The reasons and causes of business failure are not exhaustible, however it is clear that when the input is wrong it would definitely result into a wrong output.

It is like the law of sowing and reaping, you can't sow a bad thing and subsequently expect to reap good bountifully, that is not how life works.

What you sow is definitely what you would reap and usually we reap in tons of what we sow, regardless whether what was sown was good or bad.

So, wrong mindset and wrong location wouldn't definitely result in wrong results at the tail end.
This is an important principle of life that should not be toyed with in as much as success is the ultimately aim.

Give in everything positive as much as possible despite all odds. The business should not be located in a wrong place, the place (state) of your mind as the business owner should be in proper(not wrong and success would definitely be the outcome of that business .

In summary, put in everything positive in order to achieve positive results in your business endeavors and life generally

 

[Bookwormlux]

In everything I am doing , I've never fail to acknowledge the fact that lack of the necessary information is what usually cause a lot of businesses to fail and no any other reason can cause businesses to fall much more than this particular reason .

This is the major reason why I always advise people to seek for the information that will enable them to succeed in that business first before any other thing since this is what we'll give them a very strong foundation upon which they will be standing on for the rest of their business life .

There is actually no need for one to rush the process when you know that at the end of everything you will still fall back to the knowledge you had acquired at the beginning .

Some people fail in business because they have not been able to get somebody who will be able to reveal the main secret of that business to them, so that they do not end up taking some measures behind me without knowing what is really happening in the business .

Everything for the boils down to how much information you have about the business , and how ready you are to apply the information you have

 

[allison001]

Wow,you are absolutely right,you have listed 3 ways that leads to business failure.A lot of business Enterpreneurs fail to succeed in their business.Why? Because they don't know the tips that can lead to business success.

A lot of business fail because the don't keep records of their daily and monthly sales.They can just be buying things into the shop not knowing if they're running on profit or lose.Not having a good plan leads to business failure.

Location really matters, establishing your business in a bad location do make most businesses fall.The location includes how the road that leads to your shop is and also about power supply.These things are really important especially if you're running a drinking parlour business,every customers have in mind that you'll get a chilled drink,so failure to satisfy them,your business can fall.

Poor communication with your customers can also lead to business failure.Some business owners do not know how to treat their customers because the first day you treat and talk with your customers will decide if they're coming back or not.
So being so friendly with your customers will not let your business fail,if possible knowing them by their names is also another thing to prevent business failure.

 

[sincerem]

Greed is one of the factors that slows down the progress of a business since the owner wants to sell products costly and make things unbearable for customers, such makes the entrepreneur losing customers to other competitors whose rates are better off. We should always watch our competitors and see how much you bought and how much you'll be selling in order to stay afloat and not running out of market due to poor decision making. Location is one of the utmost priority for the entrepreneur to record high level of sales and at same time recording the lowest sales too, due to bad location choice slowing attention of people people.

 

[Kendy]

A lot of business owners who fail at a particular business is due to lack of proper planning. Planning is quite different from proper planning. The ability to plan effectively would bring efficient results. There is need to have a feasible business plan and not setting unrealistic goals which cannot be achieved in the short run. It would be recommended to employ the services of a professional to draft out a business plan according to your capital and the potential profits. Another reason for common failure in business is lack of reinvestment. Some business owners do not reinvest the profits they make inorder to make the business boom. At the sight of having profits, they immediately use it to solve their needs. This is not advisable, at least half percentage of the profits should be reinvested in the business to make it continuously stand out. Poor location is also an impediment to an effective or sustainable business. When the location does not match with the needs of the target or specific audience, them there is a total misfire because patronage would be deficit. Lack of proper funding makes a business crippled. It is pertinent that a business should be adequately funded to ensure its growth.

 

[Deleted member 72542]

disorganization by not having a plan before you staterd.

 

[Setho]

There are a lot of people who usually jump into the business space because they want to make money without first of all having to understand how it works. This has made a lot of people to lose money that ordinarily they will not have done if they did the right things and did not commit the most common mistakes that other people in the past did.

1. Inappropriate planning . There are some people who their businesses have failed because they just jumped into it because they saw other people doing it and becoming successful in it . This is seriously not how business is work because if you want to create a business you first of all you need to do some research to know if you have the capabilities to have created that business and manage it .

2. Lack of capital . There are some people who are very ambitious when it comes to businesses and they usually start a business with a very small amount of money that is not even enough to buy the major equipment. These kind of businesses are likely to fail because if the business does not grow very fast your competitors are going to steal your ideas .

 

[Jasmine]

In my opinion, the main reason for a business failure is not having a proper marketing strategy. If you market your business well, your business will never fail. One of the reasons why some business are not marketed well is because of lack of funds. Some people are in such a hurry to start a business that they launch the business without adequate funds. They don't have enough money for product development, they do not have adequate money for hiring experienced staff, they do not even have enough money to market their products. Sometimes bad products are also the reason for a business failure.