1 / 7

Ch. 5 Notes Pg. 107-110 Why Do Businesses Fail?

Ch. 5 Notes Pg. 107-110 Why Do Businesses Fail?. Reasons for failure are usually more obvious than reasons for business success… a) Lack of skill / knowledge b) Expanding too quickly c) Lack of capital d) Inability to stay competitive. Lack of Skill or Knowledge.

italia
Download Presentation

Ch. 5 Notes Pg. 107-110 Why Do Businesses Fail?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Ch. 5 Notes Pg. 107-110Why Do Businesses Fail? • Reasons for failure are usually more obvious than reasons for business success… a) Lack of skill / knowledge b) Expanding too quickly c) Lack of capital d) Inability to stay competitive

  2. Lack of Skill or Knowledge • High school and post secondary business courses • Experience in business • Business failure often results from: 1) Poor marketing 2) Poor accounting

  3. Marketing experts: - good at promotional ideas - creative advertising - colorful & eye catching displays - predict demand - spot trends & fads - appreciation for product design/package graphic - good customer service

  4. Accountants - set budgets - Buying Quotas: limits on the amount of money a business should spend on inventory - negotiate terms - pay invoices on time - keep financial records - make sure a business is profitable

  5. Expanding too Quickly • Expansion, developing new products, franchise or acquire others businesses • Decisions need to be based on research • Businesses that become successful so fast may try to grow too quickly without analyzing expansion plans • Forgetting your origins can cause businesses financial difficulty • Some businesses are so large that change happens very slowly

  6. Lack of Capital • Running out of money is often a result of failure to budget properly • It is recommended that you have one year of operating expenses in reserve when going into business • Initial capital from  personal savings, bank loans, investors, partners, friends and family. • If a business is profitable revenue from sales will eventually cover the operating costs.

  7. Inability to Stay Competitive • Businesses can compete using their product mix, product quality, service, price, location, reputation & expertise. • Creative businesses will find a way to stay competitive • A main reason for small business success  no competition in the area • Big Box Stores: A large retail store that sells a wide range of products at low prices

More Related