Business failure among small-scale entrepreneurs

[terrific]

Well you're right about that. Things like mismanagement of funds can wreck a company badly, which is why every startup has to be very careful and make sure that employ the best methods when it comes to this area.

Startups need badly funding for them to survive. That's the first thing that they need and without which, survival of them shortens. But even with funding, that doesn't mean that they're going to survive this brutal competition and many of these startups don't make it to the end.

Any money that goes out should always be for the right reason, and not for any purpose that does not help in driving the business growth.

That is why market research and studies are needed for the startups. They need to know the market that they are targeting and they need to be focused on it before proceeding to the next stage that they're planning to do. What's wrong with these many startups, they are not yet successful in one niche then they want to expand as soon as possible which they think is beneficial and will make them successful already. That's a wrong strategy and many proved that to be wrong.

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[MFahad]

My advice is just this. If you run a business and experience failure, never give up trying and keep trying, and if you are tired, you should take a break first, then get back up, and change your ways.
And don't blame your efforts. Maybe something went wrong as long as you try and always fix what's wrong with your business, whether it's your efforts that are not optimal or there are other factors and this must be contemplated, corrected and used as a lesson.

The point is never give up, and try to keep changing the ways that have been done and failed, and always make corrections so you can get better. Because all successful business people start from failures they have experienced before and become lessons for improvement, until you find a suitable and successful business.

Yes this is verifiable that those who never loss hopes are always fortunate so if you wants to be a Victorious businessman then try to explore about the faults that your are doing in your efforts.

There is nothing which a man cannot do but one should work properly for it because the word of impossible (I m possible) signify that everything is achievable. If you are unable to get success in one project by executing every single effort then either you should change the way of your business or change the overall business to select another one.

Through continuous efforts you will one day get the reward of your hard work and your business will be acceptable by everyone as hard work never become useless.

[Twentyonepaylots]

Yes, that's right, and now borrowing from banks to be used as business capital has become a common thing for some business people themselves. But well as you said that there are indeed negative and positive sides to this action, because it involves loans to banks, as we know if some of them cannot pay their debts because for example the business is not running as expected or maybe even fails then it is very likely that they will be in a dizzy condition or confused because they have to pay the money they have borrowed and obviously there must be some pressure from the bank if their payments have problems. I even saw some of them pledging their house certificates or other valuable assets as collateral. Basically, it is difficult to find capital for those who have a middle to lower income or economy, and if they want to open a business or do business then only banks are the main choice and that is more realistic but there are risks too.

So the point is I hope that before you build a business or any field of endeavor, it is not only money that you need but you must also have a strong mentality, because difficulties or maybe failure will definitely come to you at some time in the future. So prepare everything and consider carefully before unwanted things happen.

Also, small-scale entrepreneurs often experience business failure due to various common factors, including not enough financial resources, lack of management skills, and inadequate market research on their industry and competitors. Businesses should never be complacent, and they need to keep assessing their strategies and adjusting to market changes. Succeeding in entrepreneurship is challenging, but with the right mindset and resources, overcoming obstacles and failure is possible, and a higher success rate.

[Juse14]

Yes, that's right, and now borrowing from banks to be used as business capital has become a common thing for some business people themselves. But well as you said that there are indeed negative and positive sides to this action, because it involves loans to banks, as we know if some of them cannot pay their debts because for example the business is not running as expected or maybe even fails then it is very likely that they will be in a dizzy condition or confused because they have to pay the money they have borrowed and obviously there must be some pressure from the bank if their payments have problems. I even saw some of them pledging their house certificates or other valuable assets as collateral. Basically, it is difficult to find capital for those who have a middle to lower income or economy, and if they want to open a business or do business then only banks are the main choice and that is more realistic but there are risks too.

So the point is I hope that before you build a business or any field of endeavor, it is not only money that you need but you must also have a strong mentality, because difficulties or maybe failure will definitely come to you at some time in the future. So prepare everything and consider carefully before unwanted things happen.

Also, small-scale entrepreneurs often experience business failure due to various common factors, including not enough financial resources, lack of management skills, and inadequate market research on their industry and competitors. Businesses should never be complacent, and they need to keep assessing their strategies and adjusting to market changes. Succeeding in entrepreneurship is challenging, but with the right mindset and resources, overcoming obstacles and failure is possible, and a higher success rate.

That's why small-scale entrepreneurs must prepare everything carefully and run it to the fullest, with optimism and enthusiasm. They have to take advantage of the opportunities that come their way as much as possible because if they don't they will find it difficult again if they have to start over from the beginning because they only have mediocre capital, so it is difficult to create new opportunities for entrepreneurs who are less financially capable. What's different from the rich, he is able to repeat it several times to achieve success. one-time failure is meaningless and they regard it as mere experience as evaluation material when they want to start a business again.

[bayu7adi]

In my view, when comparing truly successful businesses to those that falter, the proportion of failed ventures tends to outweigh the successful ones. The failures, often unhighlighted by the media, cast a shadow over accurate quantification. Even certain established enterprises that once soared might crumble in a remarkably short span, categorizing them as failures despite their previous ephemeral triumphs.

The essence lies in recognizing failure as the culmination of the business journey, whereas success demands continuous preservation. An individual who encounters setbacks in their entrepreneurial pursuits indeed retains the opportunity to forge anew, while a prosperous business owner must adeptly navigate the waters of sustainability to avert decline.

Hence, small and medium-sized businesses often find themselves susceptible to downfall, as sustaining is inherently more arduous than initiating afresh.

[Mate2237]

All those things you made mentioned are part a business failure. And I will also like to add some to the list so people can see them as well. The failure of government to create an enabling environment for the small scale enterprises is one one of the caused of their failure. Like what happened late last year and early this year in Nigeria was caused by the government. The government printed new naira currency and also limit the withdrawal amount of money and the whole the affected businesses more than any other thing. And this policy was enacted because of the General election in the country and after the election, the policy of withdrawal limit was not reverse so many businesses failed in the country.

And in practical observation, any business which has been in existence for 5 years and above have the capability of staying longer and if you look at things around the failure of these business as the op said they are within the 5 years interval.

[Nwada001]

Business competition is something that must be faced in carrying out a business field. so in my opinion one of the strategies that must be done is to do a fairly large promotion, especially in the first 5 years of running a business.

This is a small business that we are talking about and not a large company. Although I know a small business has the capability of having up to 100 employees, which some people can still consider large, it does not take them away from being a small business. Suggesting that a business runs up to 5 years of promotions for their business is not a bad idea, but you also have to consider other factors above the advertisement, such as the amount that is to be spent and whether the product that the business has is actually what the people want.

To meet up with competitors Entrepreneurs should always take customer relationships very seriously, and they should always be conducting some monthly or annual survey with their customers in order for them to know where their products need improvement, where they need to work on them, and what the actual demand of the customers is. Running a million promotions without a working product won't bring the company any positive results; rather, it will cost the company unnecessary expenses.

[Afnan_faizah]

I think the biggest reason why start up or small business fail is because the competition that very tight. even some big investors invest to a company and let the company spend their capital only for advertisement, promotion, discount and etc. even the company is not making any profit every single year but the company value or price in the stock market is rise. those investors gain profit from it. it create huge entry barrier for start up business that prevent them to get market share. fortunately expert said that this method is not work anymore. at least it is what happen in my country.

[dothebeats]

I think the biggest reason why start up or small business fail is because the competition that very tight. even some big investors invest to a company and let the company spend their capital only for advertisement, promotion, discount and etc. even the company is not making any profit every single year but the company value or price in the stock market is rise. those investors gain profit from it. it create huge entry barrier for start up business that prevent them to get market share. fortunately expert said that this method is not work anymore. at least it is what happen in my country.

Competition surely plays a big role in business failure, especially when small-scale entrepreneurs face big companies that have more resources and already have a well-established name and status in the business industry. Moreover, these big companies are backed up by good investors which only adds to the challenge.

[uswa56]

Most middle class companies rely heavily on banks to live and survive.
The entire system is set up like a house of carts.
One loan fails and the company folds.

Indeed, there are many companies or businesses from the lower middle class where they even start a business with capital money obtained from bank loans. But in this case there are positive and negative points from this. The positive point is that someone can start a business faster. But the negative point is that when the business doesn't go as expected and fails, of course he has to keep paying the loan repayments that he made capital.

And currently there are actually quite a lot of banks that provide loans for business capital and so on. So now more people are starting businesses from borrowed money.
And I hope people avoid this way of doing business. Even though we can start a business faster, what we have to be aware of is the very high risk when the business doesn't go well. Unless we are already 99 percent sure of the success rate of the business that will run.

Yes, that's right, and now borrowing from banks to be used as business capital has become a common thing for some business people themselves. But well as you said that there are indeed negative and positive sides to this action, because it involves loans to banks, as we know if some of them cannot pay their debts because for example the business is not running as expected or maybe even fails then it is very likely that they will be in a dizzy condition or confused because they have to pay the money they have borrowed and obviously there must be some pressure from the bank if their payments have problems. I even saw some of them pledging their house certificates or other valuable assets as collateral. Basically, it is difficult to find capital for those who have a middle to lower income or economy, and if they want to open a business or do business then only banks are the main choice and that is more realistic but there are risks too.

So the point is I hope that before you build a business or any field of endeavor, it is not only money that you need but you must also have a strong mentality, because difficulties or maybe failure will definitely come to you at some time in the future. So prepare everything and consider carefully before unwanted things happen.

Making loans to banks to build a business certainly has positive and negative impacts some people are able to pay off their loans and some are unable to pay off their loans. For those who cannot pay off their loans, of course they do not have a good plan for the business they want to build, but for those who are able to pay off their loans at the bank, of course they have properly arranged the plans for the business they are building and they consider the loan to the bank must be paid on time so that they are motivated to run their business properly so that they can repay the loan to the bank.

You are right in building a business, of course there are many things that need to be considered so that we don't experience failure in the business that we are going to build, everyone who builds a business has certainly experienced failure, but if they are able to fix it, of course they will be able to achieve their success.

[Alpha Marine]

👉 Wrong Expectations
Some startup and small business owners expect money to start rolling into their business account immediately with doing little or nothing.
The idea of starting a business with the wrong expectations and impatience has made many businesses to collapse within a short period of time.

This is one thing that people seem to always forget. It's okay to dream big and aim high but we have to be rational. You can't start a business today and expect the profit to start rolling in immediately. Sometimes when things don't go as you thought you would immediately it doesn't mean you should quit.
Running a business is quite hard and starting it up is even harder so you have to be ready for what comes after you start a business.

Don't look at others who are making tons of money from that particular business and feel you should be making that much money too. You have no idea how things were for them. So instead of thinking it's a get-rich-quick scheme, learn, adapt, grow, and find out ways you can develop your business.

Aside from that, make sure you provide grade-A level services or products.
Your business won't survive for very long if your product and or service is shit.

[slapper]

~snip~

Making loans to banks to build a business certainly has positive and negative impacts some people are able to pay off their loans and some are unable to pay off their loans. For those who cannot pay off their loans, of course they do not have a good plan for the business they want to build, but for those who are able to pay off their loans at the bank, of course they have properly arranged the plans for the business they are building and they consider the loan to the bank must be paid on time so that they are motivated to run their business properly so that they can repay the loan to the bank.

You are right in building a business, of course there are many things that need to be considered so that we don't experience failure in the business that we are going to build, everyone who builds a business has certainly experienced failure, but if they are able to fix it, of course they will be able to achieve their success.

I've encountered both successful and unsuccessful individuals. Your feedback? On target. What about banks? I am familiar with them. The finest of them. Loans can determine a business's success or failure. I assure you, its not for everyone. Certain individuals are excellent planners; they are accurate. Those individuals who regard loans as deadlines are the most intelligent.

And blunders? We've all witnessed them, so you're absolutely correct. Every enterprise experiences adversity. However, victors are determined by their fighting spirit. Restoring a business is not for the faint of heart. You must exert forceful effort. And success? The destination is delightful.

[Jody.Drummer]

👉 Wrong Expectations
Some startup and small business owners expect money to start rolling into their business account immediately with doing little or nothing.
The idea of starting a business with the wrong expectations and impatience has made many businesses to collapse within a short period of time.

This is one thing that people seem to always forget. It's okay to dream big and aim high but we have to be rational. You can't start a business today and expect the profit to start rolling in immediately. Sometimes when things don't go as you thought you would immediately it doesn't mean you should quit.
Running a business is quite hard and starting it up is even harder so you have to be ready for what comes after you start a business.

Don't look at others who are making tons of money from that particular business and feel you should be making that much money too. You have no idea how things were for them. So instead of thinking it's a get-rich-quick scheme, learn, adapt, grow, and find out ways you can develop your business.

Aside from that, make sure you provide grade-A level services or products.
Your business won't survive for very long if your product and or service is shit.

Everyone has their own dreams, and for those who dream of becoming a successful businessman, they must also be willing to undergo everything including taking risks, and there is no success or success that is not accompanied by a difficult process or even with some setbacks they experience. It's very possible and it's a journey that we have to go through. That's right, and I see a lot of people who come with high expectations of profits, can you get the profits you want? Of course you can, but I'll ask again, are you willing and ready to go through all the processes (including the difficulties) to get those big profits? I'm sure there will be many who try it first but honestly I'm not too sure they can make it to the end until it's what they expect. That's one of the differences between someone who's serious about their intentions and someone who's just hooked because they want to get something big but they're not serious about it and maybe they're not mentally ready. So in essence, if you want to run any field, especially business, then at least you must have some readiness in yourself, such as capital to move and also mentally to survive.

[red4slash]

I think the biggest reason why start up or small business fail is because the competition that very tight. even some big investors invest to a company and let the company spend their capital only for advertisement, promotion, discount and etc. even the company is not making any profit every single year but the company value or price in the stock market is rise. those investors gain profit from it. it create huge entry barrier for start up business that prevent them to get market share. fortunately expert said that this method is not work anymore. at least it is what happen in my country.

Competition surely plays a big role in business failure, especially when small-scale entrepreneurs face big companies that have more resources and already have a well-established name and status in the business industry. Moreover, these big companies are backed up by good investors which only adds to the challenge.

Apart from that, capital is one of the obstacles where they are difficult to compete, when experiencing losses small entrepreneurs will find it difficult to rebuild because of the limited capital they have, it can also actually happen to large companies, but the difference is that they have enough capital to back up the losses they have and it affects the company in the future.
If we pay attention, many small business people have to go out of business because they cannot bear all the losses. I believe that something that is built must also have preparations such as backup capital or something else, and what happens to small entrepreneurs is that they build a business without preparing it, or even they build a business with a lack of capital.

[Lorence.xD]

I think the biggest reason why start up or small business fail is because the competition that very tight. even some big investors invest to a company and let the company spend their capital only for advertisement, promotion, discount and etc. even the company is not making any profit every single year but the company value or price in the stock market is rise. those investors gain profit from it. it create huge entry barrier for start up business that prevent them to get market share. fortunately expert said that this method is not work anymore. at least it is what happen in my country.

Competition surely plays a big role in business failure, especially when small-scale entrepreneurs face big companies that have more resources and already have a well-established name and status in the business industry. Moreover, these big companies are backed up by good investors which only adds to the challenge.

Apart from that, capital is one of the obstacles where they are difficult to compete, when experiencing losses small entrepreneurs will find it difficult to rebuild because of the limited capital they have, it can also actually happen to large companies, but the difference is that they have enough capital to back up the losses they have and it affects the company in the future.
If we pay attention, many small business people have to go out of business because they cannot bear all the losses. I believe that something that is built must also have preparations such as backup capital or something else, and what happens to small entrepreneurs is that they build a business without preparing it, or even they build a business with a lack of capital.

That's actually a good point, if you attend some seminars on how to start in business I think they also include in the plan the backup capital in case there's a need in the business such as materials, wages for the staffs and rent. That's why it's important to invest with knowledge first before starting even a small business, you could do online webinars or seminars and there's already a lot of videos online that could help you to start a business. So once they've gain losses they will be having a hard time to recover due to they don't have a back up money.

And also the thing even the fact you have the capital, but if you don't know how to handle it like just impulsively by materials to overpriced stores for sure that would be a big waste if your business did not gain attention to customer. Remember you could do your own trademark like some DIY things for your business because people loves to try new things. For sure once you've succeed there will be other people will copy your trademark and competition is on which can make your business boom!

[erep]

If we pay attention, many small business people have to go out of business because they cannot bear all the losses. I believe that something that is built must also have preparations such as backup capital or something else, and what happens to small entrepreneurs is that they build a business without preparing it, or even they build a business with a lack of capital.

Every business has financial management to anticipate losses unless business people do not organize financial management so that they have to go out of business if they do not keep reserve funds to maintain their business. But for lower level businesses it will be easy for them to build another business because they don't need high funds to start a business from scratch, but for high level businesses it will be difficult to start a business from scratch if they don't save reserve funds, it is impossible to apply for large loans for their business .

An important factor is that they must have financial management and a solid team to run the business, they also need to prioritize financial advisor positions so that the company's finances are managed properly for business growth.

[bangjoe]

If we pay attention, many small business people have to go out of business because they cannot bear all the losses. I believe that something that is built must also have preparations such as backup capital or something else, and what happens to small entrepreneurs is that they build a business without preparing it, or even they build a business with a lack of capital.

Every business has financial management to anticipate losses unless business people do not organize financial management so that they have to go out of business if they do not keep reserve funds to maintain their business. But for lower level businesses it will be easy for them to build another business because they don't need high funds to start a business from scratch, but for high level businesses it will be difficult to start a business from scratch if they don't save reserve funds, it is impossible to apply for large loans for their business .

An important factor is that they must have financial management and a solid team to run the business, they also need to prioritize financial advisor positions so that the company's finances are managed properly for business growth.

We don't know what small business that is talking about, because every person's view of a small scale business has a different interpretation from their respective perspectives, my views of street vendors can also be said as small businessmen or common Also entrepreneurs, and they do not need large funds in starting their business, as long as they have the ability to form products or provide services, of course they can easily start when they fail in one field.

But the most important thing in this case is, no matter how much or small the business is run, financial arrangements or financial management must be there, and the mentality should be formed in financial governance must be really considered, because it is the most important capital in business. With that note if you still do not have a family or do not have the burden of the lives of others that you are responsible, except those who have dependents of family life, of course, preparation must be mature and have a reserve fund and others, because failure is a disaster if the situation is like that.

[BRINIRHA]

I think the biggest reason why start up or small business fail is because the competition that very tight. even some big investors invest to a company and let the company spend their capital only for advertisement, promotion, discount and etc. even the company is not making any profit every single year but the company value or price in the stock market is rise. those investors gain profit from it. it create huge entry barrier for start up business that prevent them to get market share. fortunately expert said that this method is not work anymore. at least it is what happen in my country.

Competition surely plays a big role in business failure, especially when small-scale entrepreneurs face big companies that have more resources and already have a well-established name and status in the business industry. Moreover, these big companies are backed up by good investors which only adds to the challenge.

In today's era, promotion or marketing is the thing that must be prioritized to attract more customers. And yes, at this step, more capital is needed to fund the promotion and marketing. And those who lose in promotion and marketing are the ones who will slowly experience defeat. So it is not surprising that many companies are starting to go bankrupt. But in the end, the quality and comfort provided by a company to customers must also be prioritized. Because of course consumers will stay and become regular customers if they feel comfortable. Currently in my country the online shopping platform companies that are most widely used because of their convenience are Shopee and Lazada. They make customers satisfied with their services. And the promotions they do never stop. They realize that promotion is important in the digital era.

[carlfebz2]

Most middle class companies rely heavily on banks to live and survive.
The entire system is set up like a house of carts.
One loan fails and the company folds.

Indeed, there are many companies or businesses from the lower middle class where they even start a business with capital money obtained from bank loans. But in this case there are positive and negative points from this. The positive point is that someone can start a business faster. But the negative point is that when the business doesn't go as expected and fails, of course he has to keep paying the loan repayments that he made capital.

And currently there are actually quite a lot of banks that provide loans for business capital and so on. So now more people are starting businesses from borrowed money.
And I hope people avoid this way of doing business. Even though we can start a business faster, what we have to be aware of is the very high risk when the business doesn't go well. Unless we are already 99 percent sure of the success rate of the business that will run.

Yes, that's right, and now borrowing from banks to be used as business capital has become a common thing for some business people themselves. But well as you said that there are indeed negative and positive sides to this action, because it involves loans to banks, as we know if some of them cannot pay their debts because for example the business is not running as expected or maybe even fails then it is very likely that they will be in a dizzy condition or confused because they have to pay the money they have borrowed and obviously there must be some pressure from the bank if their payments have problems. I even saw some of them pledging their house certificates or other valuable assets as collateral. Basically, it is difficult to find capital for those who have a middle to lower income or economy, and if they want to open a business or do business then only banks are the main choice and that is more realistic but there are risks too.

So the point is I hope that before you build a business or any field of endeavor, it is not only money that you need but you must also have a strong mentality, because difficulties or maybe failure will definitely come to you at some time in the future. So prepare everything and consider carefully before unwanted things happen.

Making loans to banks to build a business certainly has positive and negative impacts some people are able to pay off their loans and some are unable to pay off their loans. For those who cannot pay off their loans, of course they do not have a good plan for the business they want to build, but for those who are able to pay off their loans at the bank, of course they have properly arranged the plans for the business they are building and they consider the loan to the bank must be paid on time so that they are motivated to run their business properly so that they can repay the loan to the bank.

You are right in building a business, of course there are many things that need to be considered so that we don't experience failure in the business that we are going to build, everyone who builds a business has certainly experienced failure, but if they are able to fix it, of course they will be able to achieve their success.

As much as possible then it would really be that entirely be recommended or suggested on building or making a business which isn't a loan or simply came from your own savings or funds which are intended for business or investment. Although not all would really be having that kind of allocation then this is why they would really be considering on taking up some loan in banks. Yes, it isnt bad but the risks of possible or potential problems is there since not all the time we would really be succeeding. This is why in taking up some loan then be sure that you would really be able to repay if ever the business would failed out or simply having those back up plans because if not then you would really be finding yourself on great trouble.

If we do speak on taking up a loan for some business expansion then it wont really be a bad idea. In overall it would really be just depending on a certain individual since not all
would really be that successful but there are ones who are risks takers on which they wont really be able to know if they would succeed unless they would try and this is why they do come up
with this kind of option.

[dothebeats]

I think the biggest reason why start up or small business fail is because the competition that very tight. even some big investors invest to a company and let the company spend their capital only for advertisement, promotion, discount and etc. even the company is not making any profit every single year but the company value or price in the stock market is rise. those investors gain profit from it. it create huge entry barrier for start up business that prevent them to get market share. fortunately expert said that this method is not work anymore. at least it is what happen in my country.

Competition surely plays a big role in business failure, especially when small-scale entrepreneurs face big companies that have more resources and already have a well-established name and status in the business industry. Moreover, these big companies are backed up by good investors which only adds to the challenge.

In today's era, promotion or marketing is the thing that must be prioritized to attract more customers. And yes, at this step, more capital is needed to fund the promotion and marketing. And those who lose in promotion and marketing are the ones who will slowly experience defeat. So it is not surprising that many companies are starting to go bankrupt. But in the end, the quality and comfort provided by a company to customers must also be prioritized. Because of course consumers will stay and become regular customers if they feel comfortable. Currently in my country the online shopping platform companies that are most widely used because of their convenience are Shopee and Lazada. They make customers satisfied with their services. And the promotions they do never stop. They realize that promotion is important in the digital era.

It is indeed very important to ensure that a good promotion or marketing is at work for a business to maintain good status. Having a good marketing plan welcomes various benefits for businessmen, whether they are new or are already well-known in the industry. In fact, according to Bradley (2019) in his article entitled The Importance of Promotional & Marketing Strategies posted in Chron, there are three significant benefits that a good promotional and marketing strategy brings. First, promotional and marketing strategies allow businesses to understand and have a better connection with their clients and customers as by having the right marketing plan can lead your business to the right demographic to have better access to your target clients and customers. Second, promotional and marketing strategies also lead businesses to have better development of financial goals as financial goals are correlated to sales targets. Lastly, promotional and marketing strategies assist in strategic planning.

To have a better understanding of these points here is the article: https://smallbusiness.chron.com/importance-promotional-marketing-strategies-57205.html