Question
State FOUR causes of business failure.
Answer
- Insufficient funds - the entrepreneur may underestimate the start up capital and operational capital. When the entrepreneur is unable to access additional finance, the business is likely to fail.
- High interest on loans -Poor judgments of the marked e.g producing goods not required by the market
- Composition - on entrepreneur who produces products which do not match quality of other existing products may be edged out of the market.
- Poor marketing strategies - If the entrepreneur is not able to make consumers aware of his product, then he is likely to fail due to poor sales
- Poor customer relations
- Poor time management eg. opening late and closing early.
- Poor pricing practices
- Poor knowledge in bookkeeping.
- Poor managerial skills and unqualified staff
- Improper debt management
- High interest on loans -Poor judgments of the marked e.g producing goods not required by the market
- Composition - on entrepreneur who produces products which do not match quality of other existing products may be edged out of the market.
- Poor marketing strategies - If the entrepreneur is not able to make consumers aware of his product, then he is likely to fail due to poor sales
- Poor customer relations
- Poor time management eg. opening late and closing early.
- Poor pricing practices
- Poor knowledge in bookkeeping.
- Poor managerial skills and unqualified staff
- Improper debt management
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