Business is one of the most popular enterprises practiced by people in the world. The reason for this is because of the conducive environment given to people practicing these enterprises. It is believed that setting up a business does not require many facilities and no minimum amount is required to start it. It is also believed that no qualification is required in setting up a business. All these among others have caused the growth of businesses in many places across the world. (Biz/ed, n.d.)
Due to the growth of businesses without qualifications, many challenges have caused businesses to fail. Researchers show that most businesses that are set up do not last for more than five years. For businesses to run well, there is a need to discern the reasons that cause a business to fail. Some strong factors are known to cause businesses to fail. One of these is poor business planning. If a business is started without proper planning, there is a high chance for it to fail. For any business to remain strong, proper planning should be adhered to at its initial stages. There is also the need for experts to provide insight on how to set up businesses in a way that will enable them to remain running. Since poor planning wrecks a business, it is important to ensure that great care is applied in business planning. (Loveureyes, 2009)
Another cause of business failure is management deficiency. It is said that when supervision falls short, a business has a high chance of failing. Management is important in a business that needs a sensible supervision system. When the management is poor, it is hard for the business to grow successfully. Another problem that has been a leading contributor to business failure is fixed budgets. When a budget is tight, the business will have a high chance of running short of money.
As an effect, this causes a business to fail. (Zopounidis,& Dimitras,1998,p.125) Erroneous location is also another cause of failures in business. It is said that if the business is located in places where there are no people, it becomes hard for it to grow. Poor services or unpopular products are other factors that cause many businesses to fail. It is a known fact that for a business to stay ahead of its competitors, standard service has to be maintained. It is also believed that deprived services or low-quality products fail in businesses. (Farrar, 1979, p.75)
Keeping untrained staff is another cause of failure for businesses. If the managers are not fully trained, they become unable to run an enterprise efficiently hence causing it to fail. Lack of unity among the staff also contributes a big part in the ruin of many businesses. When the customers understand that employees are not on good terms, they lose trust with them resulting in low production and by so doing, the business starts deteriorating. All these factors among others contribute a lot to the failure of many businesses. Stern measures should therefore be taken to enable businesses to stand firm without the fear of failing. (Keough, 2008, p.162)
With minimum requirements being required to set up businesses, many challenges have presented themselves in maintaining the businesses. Some issues like poor management, erroneous location, poor services, and having untrained staff have caused many businesses to fail. It is very important to know how to handle a business for it to remain firm. Finally, proper training should be introduced to teach people who want to start businesses to ensure that they start businesses which will stand and keep growing.
References list
Biz/ed. (n.d.) causes of business failure. Web.
Farrar, H. (1979). Company insolvency, Taylor & Francis, pp. 56-87.
Keough, D. (2008). The Ten Commandments for Business Failure, Portfolio, pp. 156-190.
Loveureyes. (2009). What causes a business to fail? Web.
Zopounidis, C,& Dimitras, A. (Ed). (1998). Multicriteria decision aid methods for the prediction of business failure, springers, pp. 117-171.