Question

Explain five reasons for business failure

Answer 1

The success of a business depends on various factors depending on the nature and type of business . There are various reasons due to which a business taste failure. The first one is the leadership. The leader is the captain of the ship and the success of the business depends on the success of leadership. If the leader is not effective the probability of business failure increases. In an organization problems requires strong leadership and if the leader isreluctant to take charge and resolve the issues business continues to slip toward failure.

The another reason which could lead to business failure is inability to identify the customers needs. Modern business word is not that will accept what we produce rather we have to produce that what consumers wants. Now days consumer is the king. For being successful in highly competitive market we have to identify the needs of customers .

The third reason why business fails is poor financial management. As accounting and financial management seems very complex for many people and they are not able to understand it clearly. Poor accounting practices may lead to failure of the Organization.

The fourth reason why the business fails is the lack of uniqueness. For every business there is need to have a USP that attract customers. The world is full of similar products and customers always try for unique product. The inability to have a unique standing in the market leads to business failure.

The fifth reasons for business failure could be a business model that is not profitable. The idea for business must be taken after proper feasibility studies. In some cases even the idea is sound but issues involved in implemented leads to failure of business. There can many other reasons also like poor marketing strategies, lack of co.ordination etc.