6 reasons why so many businesses collapse

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It can not be ignored that so many businesses has collapse around the world. Many put in effort to build business for many years at the end, the business will collapse. What really could be the challenge? . In this post i an going to talk about six reasons why so many businesses collapse.

• Low demand of goods and services
• Low capital and financial support
• Lack of training and no experience
• Poor management
• Setting up new business with loan
• Low profit

It is now time to look into it one after the other. When you know mistake that others made, there is no need to repeat it if you are thinking of starting a new business. Something moved me to choose this topic.

On Saturday, my neighbor, came to me complaining of what happened in her POS business. She said her sales girl transferred 54k and 37k to two different customers without withdrawing from their account first. She said, the girl have been making this mistake since she started work. She was frustrated and devastated.

POS Business is a small and big business in Nigeria now depending on your capital and location. She told me how she has been running lost instead of profit in the business.

I asked her question, how do you train those girls that work with you? Do they have the experience before? She told me that she trained them for 2 weeks. You can imagine that. Only 2 weeks training for someone who do not have any experience in a business. The future of that business is failure. It is good to get adequate training or train your sales girl very well before leaving the business in her care. Let me not take you out of the six reasons why businesses collapse.

1.Low demand of goods and services
One may have experience in his business, have enough capital and financial support in his business. But still will not do well. one of the reason from my experience is the location. Let's say that you want to start building materials business. It will be nice to get a shop in building material line in the market or along the road with space where people can park and come inside. You also need to buy what people buy on daily basis.

If you choose a shop in a small street where few people are living. I tell you no matter how much you put in there, the demands for goods will be small. Because you are not in a good location for the type of business you are doing. So why chosing a location for your businessconsider those things.

2.Low capital and financial support

Many people have the business experience and in a better position. They suffer to build a good business. One may ask why? All the daily expenses, feeding, transport, house rent, school fees etc is cared for from this small business with low capital. When he try and try and is not growing,the next plan will be to quit. If you have run a business with blow capital or have seen someone who has, you will agree with me that is not really easy to grow such business. Low capital, low income.

3.Lack of training and no experience Lack of training and inexperience has collapse not just small businesses but big businesses too. Many people think that because they have money. They can get up one day and start a business and hope to see it grow. You can imagine a retired teacher who have not done any business before use her gratiuty money to start a Yam business. Hope you know what the outcome will be.

Many have opened a business that they do not know and then hand it over to a sales girl who do not know the business too. Only for her to sell and make account. Who tell you that the business will thrive. Before you think of starting a business it should be business you know and have the experience and also employ an experience person to handle your business for you.

4.Poor management

Poor management of business will collapse a business . Now stop and ask, who is the manager of your company? If you are the one managing your business, how are you managing it? This involves time you open and time you close. income and expenses. Knowing your customers need and treating customers with respect.

If you are not managing your business well, there is that tendency that it will collapse. Business hours should not be used for any other thing. Business should be treated as business no matter who is involved. You don't give out money without taking the record. Business is like a baby, it needs care and attention. Failure to do so, it will collapse.

5.Setting up new business with loan

It is not good to start up a new business with loan When you run new business with loan. You must run into debt. And when that happen, you have no choice than to close down the business. Many who have started small business have confirmed that it is not a good move. Why start business today and close it tomorrow. It will be nice to prepare well before starting a business.

6.Low profit In as much as business is gain and profit it is really discouraging to run a business with low profit. I remembered that in my business, i stopped selling recharge card when the profit reduced. If you are in business, you must be Smart to know when to stop buying a particular product. I use to sell recharge card very before bank added all those things to their products and many people have learn to recharge electronically so buying big amount of recharge card became a waste and i stopped it.

If you are experiencing low profit, try buy different products in your business and see how it will go. Sometimes low profit could be as a result of what you are selling. But if not, buy things in Canton or in dozen. For example, provision business is one business with low profit if you are buying by counting. But if you buy in cartons, you will make much profit because is fast selling products. And do not forget that your location is important in type of business you want to build.

Conclusion

Are you a business man or woman? Has your business collapse or about to collapse? Is your capital to small to run the business? Are you suffering because you are running business with loan ? Take to heart the principles of business and gradually build a big business. Since you have seen reasons why businesses collapse. We hope to see you build big business.