Why Businesses Fail

Starting a business is easy. Making it successful and lasting is not. Success requires paying attention to what is happening in your business and making adjustments along the way. But too many business owners are so busy dealing with day-to-day operations they neglect to build a strategy to grow and sustain the business.

Rarely does a business fail suddenly - instead, failure happens over time. And most businesses fail due to internal factors, not external factors like competition or economic conditions.

Some of the most common reasons businesses fail:

Management
Inability to reach decisions and act on them
Failure to keep pace with management systems
Poor personnel relations
Loss of key personnel
Illness of key personnel
Lack of staff training
Poor relations with suppliers
Reluctance to seek professional assistance

Finance
Growth without adequate capitalization
Ignoring adverse financial data
Inadequate financial records
Poor control of receivables
Poor or lack of forecasting
Extending too much credit and poor credit control
Insufficient working capital
Over-borrowing or using too much credit
Inefficient cost and quality controls
Poor pricing strategies
Poor business planning

Marketing
Loss of sales momentum
Poor customer relations
Inability or unwillingness to address competition
Failure to anticipate market trends
Failure to promote and maintain a favorable public image