Reasons why a new business may fail

Explain reasons why a new business may fail

• Inadequate capital/ lack of funds- initial/ operation capital may be inadequate to sustain/ run/ expand due to lack of collateral/ security
• Poor inappropriate marketing/ strategies/ leading to low sales/ fewer customers/
• Unfair/ stiff competition
• Inadequate/ lack of poor/ inefficient management skills. The business may have insufficient skills to operate/ manager
• Lack of inadequate manpower
• The business may not have enough manpower to operate/ manage
• Lack /inadequate modern technology/inappropriate technology. This may lead to less quantity/ quality goods/ services
• Unfriendly / poor management policies. May be the government policies are unfavourable to the growth/ explosion of business
• Inadequate/ lack of market due to low income of buyers/ customers/ cultural practices/ beliefs
• Poor pricing which might make the produce/ services too expensive to attract buyers/ too cheap to sustain the business
• Inappropriate product/ business for the intended market/
• Political instability/ insecurity that may hinder smooth running of the business
• Poor/ inadequate infrastructure which may hinder access the market/ inputs/
• Lack of planning to accommodate future changes.
• Misallocation/misappropriation of resources leading to wastages/ misuse of resources.
• Poor customer relation/ care leading to loss of market.
• Poor time management which may cause loss of business opportunities/ inabilities to accomplish tasks