Why Do Small Businesses Fail?

[Spencer]

There's a very high failure rate for small business, they tend to mostly fail in their first year, so in this post we will be looking at factors that makes business fail in the first year.

1) Under Capitalization: Most small business do not have the required capital to run their business, which will make their business fail when they're not able to finance their inventory.

2) Lack of Experience: Some business fail because the owners lack experience on how to run a business effectively and also how to take charge when business challenges arise, this makes them to make rookie mistakes that can throw the business into jeopardy.

 

[Mika]

Well, not all small business fail. I have been running a small business for a couple of years and I have not failed yet. Well, I do not generate a lot of sales but that's ok because I make enough money to maintain the business expenses and also in the mean while earn profits. Small business can fail due to the lack of skills and knowledge, lack of funds for marketing and introducing new products, and also high expenses. If you start small, also try to keep it simple to maintain the cost.