Why Small Businesses Fail?
If you investigate any business, you will soon discover that, no matter what the odds are, some succeed, while others go bust pretty soon even if they begin very promisingly. Businesses usually fail for one of the following reasons. • Management and entrepreneurial factors – incompetent management, bad people skills and human resource management, lack of proper marketing, not securing regular and sufficient cash flow, wrong resourcing, wrong business strategy, wrong business model for chosen industry, success goes to the entrepreneur’s head etc. • Legal environmental and socio-economical factors – if government enacts laws to forbid certain previously legal activities or require stricter permits for providing services or if the business activity is illegal in the first place e.g. selling marijuana at a café or combining sex with massage etc., then the business might fail. Some businesses also fail because their products or services are not relevant anymore. • Market situation factor –
