Reasons for Failure



12 Most Recurring Reasons for Failure
Here are 12 reasons that could be the cause of failure in your business:

  1. You have gone into business for the wrong reasons.
  2. You don't ask professionals for advice, but tend to listen to your family and friends only.
  3. Your business is operating in the wrong place at the wrong time.
  4. You have family pressures on both your time and money.
  5. You underestimate the time and the commitment required in running a business.
  6. You are too proud and won't listen to anyone who points out the problems you could face.
  7. You don't know anything about the market you are entering into.
  8. You believe in your product and are not prepared to change it to meet market demands.
  9. You don't have the financial responsibility and awareness needed to be a successful business owner.
  10. You lack a clear focus and plan to reach your goal.
  11. You are either an optimist, or a pessimist and not a realist. You need to have a blend of these to succeed.
  12. You have too much money. Too much money allows for inefficiencies to run in your business without being discovered until it is too late.


Big Reasons for Business Failure
Over half of small businesses collapse because of lack of cash or poor cash flow. Others fall over because no one wants to buy what they have to offer, while others simply collapse due to lack of skill or expertise in business matters.

Here is a list of the some causes for failure:

  1. Failure to control cash.
  2. Being undercapitalised.
  3. Failure to control costs.
  4. Lack of market research.
  5. Poor sales and marketing.
  6. Theft and fraud in the business.
  7. Loss of market share.
  8. Poor overall management.
  9. Directors overspending.
  10. Failure to adapt the products to meet the demand.
  11. Bad financial management.
  12. Failure to seek advice from professionals.
  13. Disputes in contracts with other parties.
  14. Bad credit policies.
  15. Poor pricing and incorrect costings.
  16. Having to increase borrowings.
  17. Bad quality of products or services.
  18. Overextending in its growth.
  19. Cash flow problems.
  20. Failure to increase market share.
  21. Customers to not pay on time.
  22. Loss of financial backing from the bank.
  23. Excessive spending on a personal level.
  24. Lack of hard work.
  25. Being unprepared to focus and commit.
  26. Disloyal Partners and Directors who steal a business from owners/founders