There are many reasons due to which small businesses fail. Some of them can be as follows:
- Lack of planning: This is the foremost reason for the failure of any business. Planning is very important in every field. A SWOT analysis is essential to be capable enough to conquer intricacy throughout its growth. A business plan provides proper guidance to the business.
- Trying to make a hobby into a business: It is not possible to change every hobby into business. Prior to setting up a small business, the concept have got to be completely studied for its possibility to stand in long run.
- Lack of experience in managing a small business: To manage a small business productively it is essential to be well-known with numerous features of the industry, its developments and own the talent needed to market one's goods and services. Lack o f experience in these characteristics can lead to disappointment in the business.
- Poor record keeping and financial controls: Small businesses don’t keep good accounts of profits and expenditures which can be the reason for the failure of small business
- Entrepreneurial enthusiasm: Entrepreneurs should be trained to distinguish between exact chances and simply new dreams that are not sensible. It is compulsory to measure up the plan with the business plan goal and observe if it the talent and time is actually existing to place the plan into exercise.
- Uneconomical money management: Making profits in small business undertakes some years, therefore not possessing good capital can hinder the expansion of the business.
- Dependence too much on a single element: Small business owners should be cautious while having only single large client. Although this may be the main basis of earnings they should credence once what might occur if they in future don’t cover the source and attempt to widen their spheres.
- Competition: Competition can be considered the most important factor for the failure of small business but they fail to recognize the true nature of competition & therefore fail to survive in the competitive markets
- Poor marketing: The high achievement of the goods & services largely depends on the high-quality marketing. So, it is essential to explore every marketing technique used and attach to those that are producing good outcomes.
- Entrepreneurial exhaustion: A small business needs a lot of tolerance, resources, time and power. Extensive working hours can lead to exhaustion and short of concern in the business which can slow down its growth.
- Faulty location: Apt Location is very crucial for the small business. If the storehouse is not found comfortably by clients and suppliers, income can undergo losses.
- Poor selling techniques: Business does not succeed when proprietors are not skilled to get possible customers to purchase their products.
- Postponing tasks and improper time management: Another reason that hampers the business is desisting important tasks. Employees can be appointed if required for doing tasks that a business owner doesn't wish to carry out.
- Low-grade quality customer service: A poor quality customer service like not attending the customer properly & answering to their queries leads to customer
