According to Patricia Schaeffer (2018).
Statistics published in 2017 by Small Business Administration (SAB), about one-fifth of business startups fail in the first year and about half of all employer establishments fail within five years, while one-third survive eight years or more than that.
Why does small business fail within their few years? Small business failure means the last stages of which a business could no longer survive a business life cycle or profitable anymore, that is falling sales and falling profit. In this report I would be writing about the reflection I possess through a personal research and findings on why small business fail within a few years of starting their business, which could be as a result of poor business strategy and planning, lack of adequate working capital, inadequate market research, wrong location. etc..
On the 18th of Oct 2018 was the day I started my outline draft alone and it took me about two hours 30 minutes to figure out what to do about my assignment.
I was at the Library 20th Oct to get some book by: Michael Lane. 2018. Creating an effective business plan. British Library.
Started reading my resources on 21st Oct 2018.
On the 27th of Oct 2018 I went online for an idea on how to start my introduction.
On the 29th Oct 2018 I start writing my introduction.
Nov 2nd I was able to get a bit information from a friend that have failed in business before.
I started written my developing my report paragraph by paragraph.
Skim reading and readjust write up.
Started typing my assignment.
Proofreading my work.
1)I would be using very important primary and secondary documents. After skim through all the materials that I got online to build up more details outline about my assignment task, after putting all my resources books I got from Library, I discover that it is necessary for me to do some further research, information and tips through online websites. Tip for academic writing I got online.
I choose my resources because they are reliable, updated, very simple for me to work with and understand. With my choosing resources have been able to improve and refine my findings. It has given me the opportunity to identify my strength and weakness, and also the best way to better myself in my next writing assignment.
MAIN REANSONS WHY SMALL BUSINESSES FAIL WITHIN A FEW YEARS OF OPENING.
Wrong Location of the business. Failure to be within the easy reach of the customers will be the number one vital problem that will fail the business and if the accessibility and convenience of the customers are not inconsideration, then the business will be totally unimportant or relevant to the customers. For example, a retail business should be reachable, while a wholesale or factory would not require a showroom at the City Centre. Simply inconveniently and inadequate location for the customers to shop will definitely fail the business.
Poor Management: Lack of management knowledge and financial management abilities or vision to run the is most frequent and primary reason why small business fail, failure to act or react. Management deficiencies were state to be related to business failure by Cover (1933). Poor financial and unbalanced capital structure, that is inability to manage working capital could fail the business.
Inadequate market research. Lack of market research about the customers needs and demands of that particular business will blurred the vision of future growth prospects of business, not knowing the clarity insight of the new business will lead to inaccurate understanding of the target market. iResearch services (2018). A poor market research and report often responsible and adversely affect the growth and success of a business and this can be due to inadequate experience in marketing.
Wrong reasons to start a business. Starting a business is a risk and the chances of the new business been successful is very slim, but starting a business for a wrong reason such as to make money, get rich, being able to be with our family is not enough to start a business or be your own boss is not enough to be successful in any business. It requires passionate attitude about the business to actually achieve the success that follow. (Schaefer, 2006).
I think most of the small businesses fail in their few years due to the blunders amount of effort exerted, inadequate finance, unrealistic expectations, inability to commit into the business, unwillingness to take responsibility and lack of planning. As someone that desire to establish a business, you should be able to have or build self-confidence to act or make a decision to succeed.
In addition, gathering information, doing research frequently about your business, weigh your facts and able to make a great decision regarding your business. If you are not ready and willingly to work hard with discipline as independent, there is no point in going to any business at all. It is very important to put more hours into your new business even more than that you do why working under someone. You will need to working at odds as a start-up new business owner and if there is no cash or liquid assets of your own to back up your business, it might be very difficult to see an investor. sometimes unrealistic expectations when it comes to funds needed to open–up a business every business owner should be able to come up with very adequate financing. There is no that bank or investor that will guarantee 100% funds for a new business without a significant portion of the owner funds or the means of paying back the loan.
Moreover, as a business owner you should be100% responsible for your mistakes. Th e last but not the least, carefully and objectively evaluate the practicality of your own idea. There is always a failure risk in a business than the expected profit return, so having other source of income to live on is something to think about before starting a business. Some business owner does not have outline of their distinctive competencies, that is the factors that will differentiate their business from the competition or clear vision of their business and reevaluated their mission on a regular basis also is one of the dangers facing small business.
Starting a successful business take more than just a wonderful idea, the realities involved with small business is proper capitalization, management skill, research and planning. Lack of all these and many more would result in business failure. There are a numbers of factors in the environment that can have impart on small business either in a positive or negative way like economic, social, technology and environmental .It is absolutely essential to have a crystal-clear ideal of what the main objectives of the business,” without SMART (Specific, Measure, Agreed, Realistic and Timed) in any business there will be definitely failure”. (Michael Lane 2018).
Some business better off starting from home, maybe on the internet first before renting an apartment. At first run the business by yourself or with the help of a family member and wait for your business to grow before employing someone, check the employment law, build you confident,
What causes small businesses to fail.online.Available at:
http://www.moyak.com/papers/small-business-failure.html Accessed:14 Nov 2018.
Patricial. Schaefer,2006. 7 reasons why small business fail. online. Available at: Accessed 14 Nov 2018.
Michael.L.2018. A guide to creating an effective business plan. A British Library: Straightforward.
Help for students. (2017). Small Business Failures. online. Available at: https://primetimeessay.com/small-business-failures/ Accessed: 1