Author name: Ashish Gambhir
Created date: 10-09-2022 04:02 PM
Top 5 Reasons of Business Failure
Business Failure – Business Failure refer to the
possibility of inadequate profits or even losses and shut down of business. There can be many reasons for
business failure but the top 5 reasons are discussed below:
- Improper Accounting – Accountings helps Business
enterprises to keep systematic records of business transactions. It helps
enterprise to know about the financial performance and financial position of
the enterprise.
Improper Accounting system in an organization does not give a
clear view about Profitability of enterprises. It is necessity for an enterprises
who carries business to determine whether their business is profitable or not, whether
their assets are sufficient for payment of his liability or not and to
determine all of these is not possible without proper accounting system. - Miscalculated Costing of their
products – It is a
big problem faced by many enterprises especially in Hotels industry. In today’s
era costing of your products play a very important role in your business
existence. Many new businesses were failed at initial stage of business
development due to miscalculated costing of their product.
- Lack of Marketing – In today scenario, we cannot
imagine a business existence without marketing. Marketing technique which is
also known as 4 P’S Product, Place, Promotion, Price is adopted by many
enterprises for their business growth. Marketing Technique not only helps you
to survive in these competitive era also helps you to get competitive
advantages over your competitor.
- Mismanagement – Management means getting the
things done by others. Managements of things and people helps in smooth
functioning of the enterprises. Mismanagement leads to ineffective utilization
of business resources which effect profitability and competitiveness of
enterprises.
- No Hierarchy – Management of whole business
activity by a single person is not possible. There should be hierarchy in every
business enterprises to avoid mismanagement. Hierarchy helps business person to
be more focused on strategic decision rather than operational decision.
