The Major Reasons For Failure Of Small Business

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Over the years, many people have started small businesses, but not many have succeeded. Some get lucky and some just don’t have the tendency to proceed after a certain number of years. As stated, more than half of all small businesses fail within the first four years. There are many factors. for example, one could be poor management leading to loss of staff due to lack of motivation. Another factor could be making wrong business decisions that lead to loss of profits and force them into bankruptcy. Last but not least reason to failure of small business is presenting the wrong types of products or services in the wrong type of markets. Many business owners don’t realize how important staff appreciation is or even a small amount of motivation…show more content…
In order to run the business effectively, its extremely important to understand the industry and its trend. small business usually tends to have less understanding of the industry and less business knowledge and therefore they experience business failure early. Many small business fails because they are located in the wrong location. Wrong location could also be another main reason to why small business fail early. To all businesses, location is huge part of success, it should be convenient to your customers, suppliers and employees ”A truly profitable location will make money and the business will appreciate in value.” (Willerton, 2010) A business will be successful if it is located in the right…show more content…
One reason for failure is that small business lack the knowledge of marketing and they are presenting the wrong service for the wrong crowd. For example, like presenting products that only attracts their current consumers. It doesn’t help the business to grow and gain new consumers. Another reason small business fail because they’re not doing proper demographic research or It could also be the Stronger competition in the market. There is a higher chance of success due to big business and other competitions in the market that can lead small business

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