Recently i had a research on why and how small business fail and i concluded with some findings which are stated below. Many people want to start a business or many are already in business based on no other reason than profit.
A Business consultant said, 90% of new business tends to collapse on the 1st to 2nd year of establishment based on some factors. Despite the business ideas, the business plan, the working capital, the time etc. No one pray for his/her small business to collapse. See the reason below;
1. No workable Business plan
2. Lack of understanding of small scale business.
3. Lack of planning.
4. Lack of fund.
5. Lack of business focus.
6. Lack of enabling environment.
7. Poor Managerial skill.
8. Unfair Government policies.
9. Insufficient capital to start the small business.
10. Change - inability to change
11. Lack of focus
12. One Man Mentality.
13. Inexperience record keeping.
14. Employing greedy family members
15. Using income of business for party or family events.
16. Starting a business because you want to be rich.
17. Lack of discipline at work.
18. Starting a business because its the hottest thing.
19. Starting a business because because you are tired of your job.
20. Starting a business because you want to own your own company.
21. Taking advantage of female staff.
22. Multi tasking - doing two or more business at a time.
23. Lack of business innovation.
24. Paying peanut for employees.
25. Lack of in structural materials on business.
26. Lack of Education
27. Lack of seriousness.
28. Always wanting to get rich fast.
30. I don't care attitude towards business/competition.
Those are the real causes of failures in small business. I might not have time to expatiate on each listed above but you can easily pick one or two point from that. Work on those point above, start your business and see the change. Happy money making.