Question

Mariam is aware of the importance of working hard and thoughtful planning to open and operate a successful startup . Since she is a novice entrepreneur she is lacking expertise and experience in developing a good business plan . To advice Mariam , explain the reasons why some business plans fail . Support your answer with an example .

Answer 1

We know that people have so many ideas to start new business. But it is very difficult to make success in a business if there is no proper planning. For eg. If a person is planning to start woolen cloth factory in a hot region it is very difficult to make success in the business. Hot regions don't need woolen cloths. Because there is no cold and the demand for such products will be very low. But if we plans to export the product to other cold region, the business will become success.

Thare many reasons for the failure of business. They are,

1. Lack of business plan - it is very necessary to plan about the business model, where to start business, when to start business, estimation of average expense etc. If there is no planning business will fail.

2. Lack of capital - if there is no enough money in the hands of entrepreneur business can't be start successfully. For every new venture capital is the most important resourse which we needed.

3. Lack of leadership - it is very necessary to have a leader for controlling, supervising and managing the activities of the business firm. If there is no good leader, the business will fail. Management skill is necessary for a leader. If there is no leadership quality the person will not get the ability to manage staffs, customers etc. of the company.

4. Inefficient dealings with customers - we know that the business will success only if we have enough customers. It is very important to deal the customers in a proper way. Otherwise people will not try to choose the company for their needs. People will not become ready to buy our products. Business want to change according to the needs of the customers. We want to make modifications in the products on the basis of changing trends in customers interests.

5. Poor financial management - if there is no idea about from where the money is coming and to where the money is going business will fail. We want to be aware of the expenses and incomes related to the business. No proper accounting will also results to the failure of business.

6. Lack of popularity - if our business don't hanve enough publicity in the market and among customers there is chance for failing the business. It is very necessary to make advertisements and workshops for making popularity to the business.

7. Lack of uniqueness and values - we know there is many competitors for our business which produce same product. It is very difficult to stand with this competitors. So the business need uniqueness in their product. Company want to do things like service packages, discounts, gifts etc. for attracting customers. Like that we want make the product different from others through introducing new logo, colour, price etc.