Factors Responsible For Business Failures
In our discussion on business failures, we have stressed that there are factors which are capable of frustrating your business efforts, as an entrepreneurs it is your duty to fish out these factors and then device a means to overcome any of them. Entrepreneurs are made to understand that business failure is not the end of their world; however, there is a possibility of avoiding these factors, also it is important to note that both business failure and business success are dependent on these few factors.
The factors responsible for business failures can be classified under three major broad headings. In the first category are the factors caused by the entrepreneurs themselves. In the second category are those factors associated with government and her policies. In third category are those factors associated with government and her policies. In third category, are the factors beyond the control of either the entrepreneurs or the Government, these are natural disasters.
Factors Responsible For Business Failure As A Result Of Entrepreneurs Decision – The factor that are caused by the entrepreneurs are the lack of planning on the part of the entrepreneur, having insufficient capital, inadequate training, poor management of the business, bad or leadership which could be uninspiring to move the company forward, poor public relations, inexperience or lack exposure, premature expansion, bad location, low patronage, decline in sales and profit, declining working capital, greed on the part of the business owner or those involved in the running of the business, excessive bad debt which is directly connected to the business finance, burden of loan interest, credit sales, indiscipline (bad habits: drug addition, excessive drinking, womanizing, tax invasion, associating the business with other illegal businesses) and lawlessness.
Factors Responsible For Business Failure As A Result Of Government Policies – In this second category are those factors associated with government policies. the factors are discussed under the following heading; trade policies; (liberalization of trade, ban on the importation of some certain types of goods, also ban on export of goods from the home front, high import duties), tax policies that could cripple any business, inflation, devaluation of the country’s national currency among other factors. Other factors particular to the Nigerian environment is the increasing insecurity recorded, for example, the increase in kidnapping, political instability, election crisis, riot and war, assassination, arm robbery, fraud, stock exchange drop, duping also known as (419), vandalization of property and the liquidation banks.
Factors Responsible For Business Failure As A Result Of Natural Factors – The third and final factors without the involvement of man (entrepreneurs) or the government and are called natural disaster. These are fire outbreak which could occur at the place of your business and it even get worse of the business is not insured with an insurance company, flood, wind, storms and collapse buildings caused by earthquakes are all natural causes that can crippled an entrepreneurs business, chronic illness to the business owner (entrepreneurs) could either hurt or crippled the progress of the business, also the premature death of an entrepreneurs who is without successor could bring about the failure of the business in question and as a result many who are employed will be rendered unemployed and then global economics recession.