Seven Causes Business Failure


What causes failure in business, especially for beginners and how to prevent such failures? Not easy it is to run a business, amid tight market competition. The risk of failure even susceptible to the businessmen beginners. Moreover, if in starting a business, an entrepreneurs too hastily and without calculation.

Failure is a major risk that must be faced by entrepreneurs, especially entrepreneurs who are beginners. A business competition, the company's internal management and so forth can be one factor in the failure of a  business.

Seven Causes Business Failure

The following factors are important to note that new entrepreneurs start their business.

Attitude Businessman
The attitude of the businessman stubborn, paranoid, does not want to deal with conflict and risk, perfectionist and left that he was the most correct themselves often make them unwilling to accept the idea, advice or input from others especially subordinates. That could lead to a failure in business.

Management Dysfunction
Lack of focus, planning, vision and other standards relating to business management, coupled with a lack of good cooperation with partners could also be the cause of the failure of a business.

Operationally Inefficient 
The amount of expenditure that is used for rental, labor, materials and production coupled with employees who are less resilient and unable to negotiate (in a context that could benefit the company) will cause the company to be not competitive and failure.

Bad Accounting 
An entrepreneur cannot control the business moreover has no financial data also did not rule out the possibility of failure. A common mistake that business people who hire outside accountants to perform tax calculations as well as financial controls, whereas such work should be done by the head of finance.

Strapped For Cash 
The worse thing that could happen to your small business is losing customers as well as potential employees, the arrival of new competitors and the lawsuits that could be experienced by any entrepreneur that can lead to financial pressure on business. It could make the company into trouble in the process of recovery if the company should be owed cash by a significant amount.

Uncontrolled Growth of Business 
Too broad expansion may be one cause of failure ironic. Expansion that could fail due to a mistake in choosing the market that was not profitable. In addition, too much borrowed money to sustain its growth to a certain extent also the cause of a business failure.

Market Decline 
Type of business such as a bookstore, printing, music stores and other small business that relate to changes in the technology, market demand and competition from larger companies with greater purchasing power which is some kind of business that is very susceptible to market decline and failure.

Some of the causes of the failure of such efforts should often be evaluated to be immediately addressed. However, that should still be understood, namely the point of heavy effort on the process of production and marketing. Although entrepreneurs should remain sensitive to other factors that are often overlooked.

Read Also:

Related Posts
Disqus Comments