Causes Of Business Failure And Skills Needed To Ke

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Research Paper Nicki Hebert ENG 122 Prof. Hanscom February 22, 2010 Causes of Business Failure and Skills Needed to Keep a Business Afloat This paper will discuss the main causes of business failure and what skills are needed to keep a small business from failing. Business failure can be caused by many factors, but in some business literature, they treat business failure as a problem stemming from managerial failures. Small business owners should possess eight common traits if they intend on running a successful business. These traits are looked at differently among people but for the most part, they are all the same. Following key facts, business failure can be prevented. From here, this paper will go into detail about the causes of failure in businesses and skills needed to run a successful business. A few causes can be discussed when dealing with small business failure. First, choosing a business that is not profitable is a crucial factor. That alone can make a business fail. Another primary cause in business failure is location. An inadequate cash reserve and failure to anticipate cash flow adequately are the next common causes of business failure. Through the first six months or so before a business starts making money, if there is not enough cash to carry the business through that time that would be considered an inadequate cash reserve. When planning the businesses cash flow, take in to consideration how customers pay. If they pay with credit, it can be months before a payment is received, therefore, rethink the cash flow strategy because most suppliers require immediate payment for new businesses. Failure to price a product or service correctly can also result in business failure. (Ames) Secondly, if a business owner fails to clearly, define their market, their customers, and their customers buying habits, they can cause their
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