Mckernan

• What is business failure

  When the expenses of a business outweigh the revenue
• Financial Failure (internal factor)


  Managers need to actively manage finances, planning ahead and making adjustments when necessary
• Systems or operations failure (internal factor)

  If IT systems don't provide people with the information they need, communication is difficult

  Physical, eg Manufacturing, business can't fulfil demand
• Poor leadership

  Lack of leadership may lead to diminishing productivity and extra costs from employees quitting the job as a result of the poor leadership
• Change in Technology (external factor)

  Product may struggle to compete against better product, so will have to cut down prices
• New Competitor (external factor)


  can drive existing businesses out of the market due to perhaps better efficiency and innovation
• Economic Change (external factor)


  Recession will result in less demand for luxury goods and therefore these business may not be able to recover
• Behaviour of bank (external factor)

  Failure to supply credit to businesses or forcing businesses to accept unreasonably high interest rates will result in business failure