Why do businesses fail?

[Drik]

If you’ve paid attention to the occupancy of shopping malls over a few years, you’ve noticed that retailers come and go with surprising frequency. The same thing happens with restaurants—indeed, with all kinds of businesses. By definition, starting a business—small or large—is risky, and though many businesses succeed, a large proportion of them don’t. One-third of small businesses that have employees go out of business within the first two years. More than half of small businesses have closed by the end of their fourth year, and 70 percent do not make it past their seventh year (Knaup & Piazza, 2011; Knaup & Piazza, 2007).
Businesses fail for any number of reasons, but many experts agree that the vast majority of failures result from some combination of the following problems:
Lack of customer focus: A major advantage of a small business is the ability to provide special attention to customers. But some small businesses fail to seize this advantage. Perhaps the owner doesn’t anticipate customers’ needs or keep up with changing markets or the customer-focused practices of competitors.

Inability to handle growth: You’d think that a sales increase would be a good thing. Often it is, of course, but sometimes it can be a major problem. When a company grows, the owner’s role changes. He or she needs to delegate work to others and build a business structure that can handle the increase in volume. Some owners don’t make the transition and find themselves overwhelmed. Things don’t get done, customers become unhappy, and expansion actually damages the company.

 

[Chibson]

There are several reasons why businesses fail. One of the reasons businesses fail is because a lot of people venture into various businesses without having proper knowledge of how such business work's. Lack of idea and knowledge is one of the major reasons for business failure. Another major reason is lack adequate finance.

 

[btaliat]

There are many reasons why businesses fail. The first one to me is lack of focus, some business owners don't have focus. They don't even know what is the purpose of the establishment. They don't have a particular problem that they want the business to solve.

 

[Mataracy]

If you’ve paid attention to the occupancy of shopping malls over a few years, you’ve noticed that retailers come and go with surprising frequency. The same thing happens with restaurants—indeed, with all kinds of businesses. By definition, starting a business—small or large—is risky, and though many businesses succeed, a large proportion of them don’t. One-third of small businesses that have employees go out of business within the first two years. More than half of small businesses have closed by the end of their fourth year, and 70 percent do not make it past their seventh year (Knaup & Piazza, 2011; Knaup & Piazza, 2007).
Businesses fail for any number of reasons, but many experts agree that the vast majority of failures result from some combination of the following problems:
Lack of customer focus: A major advantage of a small business is the ability to provide special attention to customers. But some small businesses fail to seize this advantage. Perhaps the owner doesn’t anticipate customers’ needs or keep up with changing markets or the customer-focused practices of competitors.

Inability to handle growth: You’d think that a sales increase would be a good thing. Often it is, of course, but sometimes it can be a major problem. When a company grows, the owner’s role changes. He or she needs to delegate work to others and build a business structure that can handle the increase in volume. Some owners don’t make the transition and find themselves overwhelmed. Things don’t get done, customers become unhappy, and expansion actually damages the company.

I belive that many business fails because people fails to plan.
In business one need to set things right before entering in to business unless the business will collapse and there will not be any success to be recorded at the end .

Good research is needed and if one could not do proper planning it will be hard to succeed in business.

 

[Abigael]

Those are very true reasons why businesses usually fail. I totally agree with that point of uncotrolled growth. When the business is expanding, most business people tend to loose focus maybe due to the pressure of the growing business. That is why growth needs so much control. Another reason could be lack of skills in financial management, marketting and book keeping which are very essential in business.

 

[Alexandoy]

To be frank, we can write a book on the reasons that make business fail. Let me cite one actual example that the wife left the business owner for another man. The business owner got mad and neglected his business. It was like a death wish for the business because the capitalist was the rich wife who left him.

 

[PICKFORD]

A lot of businesses fail because many people don't have the idea or knowledge about the particular business they are about to establish, another reason why some businesses fail is that the business owner is use to giving out his or her goods in credit,when establishing a business you must plan ahead,be ready for the loss when the time comes.

 

[Ferozas]

A business fail when people stop imagining and creating, loving and caring

 

[Augusta]

Firstly, business fails when the owner isn't serious and knows nothing about the business they went into. You don't just copy and paste another business without learning the ropes you will fall at it.another is lack of good capital to stay afloat. It can make the business go down very quickly

 

[Kingsley]

For me i think one of the major reason why business fail is because of lack of technical know-how by the owner of the business. Other reasons could be ascribed to the strength of the capital, again we may consider the ability of the owner to persuade consumers to purchase their products or services. There other wider range of fsctors as market location.

 

[Lens1000]

There are countless number of reasons why business fail. It could be poor management, when a business is surrounded by employees who are not passionate, who cares about their pocket . It could be capital, Smooth running of the business majorly depends on the capital. It could be improper plans, when the plans are not clearly defined the business will fail

 

[Sherman198]

I think business crumbles during crisis.....And there are instances or circumstances that enable to crisis to occur to any business. I think when the owners can't keep up with competitors, business can damage. Or when there's mismanagement of business funds.

All these can really bring down any booming business.