why businesses fail

• What is a common reason for business failure?

  Liquidity problems
• Why are regular cash inflows crucial for a business?

  They are needed to pay daily running costs
• What initial errors can lead to business failure?

  Launching the wrong product
• Why can initial mistakes be detrimental for a business?

  They can be hard to solve and waste startup cash
• What can cause a business to fail due to lack of management skills?

  Poor decisions by managers
• What aspects of a business do managers decide that can lead to failure?

  Product type, market segment, marketing strategies
• Why is establishing a good reputation important for a business?

  It can be time-consuming and hard for new businesses
• How can a strong reputation be lost by a business?

  By making errors
• What market condition can lead to many businesses failing?

  A recession
• How do consumer needs and wants change during a recession?

  They may shift, affecting business sales
• What challenges do some markets present for businesses during a recession?

  Some markets can be harder to enter
• How can government actions during a recession affect businesses?

  They may increase tax payments, reducing profits
• What can happen to smaller businesses due to large competitors?

  They can be squeezed out of the market
• Why can larger businesses outcompete smaller ones?

  They can afford to invest in new products