Causes of Business failure

  1. Inappropriate business management and technical skills (adaptable to changing customer needs).
  2. Inadequate financing
    • Start-up
    • Operating
    • Expansion capital
    • Personal expenses
  3. Lack of proper record keeping
    • Use of records for sound decision making
    • Little understanding of accounting records
  4. Improper costing and pricing
    • Retail
    • Manufacturing
    • Service business
    • Direct costs
    • Indirect cost
  5. Incompetent employees
    • Lack of motivation
    • Poor pay
    • Unskillful
    • Job not marching skill
    • Employment of relatives
    • Inaccurate recruitment procedures
    • Training and development
    • Clear job description
  6. Neglecting customers
    • Customer centered organization
    • Exceed customer expectations
    • Survey customer satisfaction
    • Provide avenue for resolving customer issues
    • Prompt service and resolution to customer
    • Customer friendly terms
  7. Ignoring competition
    • Know your competitors
    • Know your position in regard to your competitor
    • Know the competitors strategies
    • Note direct, indirect and future competitors
    • Coping strategies
  8. Neglecting suppliers
    • Make prompt payments
    • Develop good relationship with suppliers
    • Adequate time to supply



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