Why do so many small businesses fail?

Answer 1

wrong location

Answer 2

Greetings
I think that many small businesses fail because the person gives up to early. Like everything in life, there are season for everything and that is the same for small business. We live in a society where we expect to see things instantly. After we build the websites and print the business cards, we expect to see the money rolling in.
A small business has to go through all of the growing pains before one sees the results. Many times a small business will not show any real profit for a few years.

Answer 3

Even if well capitalized, which is usually not the case, many people new to running a business are not prepared for the amount of time it takes to reach profitability. At average pre-tax profits of 3-5% of sales (once you become profitable that is) it can take a long, long time to generate the kind of return that makes the endeavor worth the effort. Also, small business owners have less time off and more pressure than employees. BUT IF YOU CAN make it through the rough start it is a very rewarding experience.

Answer 4

There can be thousands of reasons, but most of the time is because in order to make it grow you need to sacrifie a lot and deal with the fact that in the first few years you will not get much out of it. People give up easily because they had thought that being your own boss and having a business would be a relief. In fact being on your boss doesn't mean working at your own pace but at the market's pace.
Another factor is the financial knowledge and the ablility to understand how well or badly your business is run.

Answer 5

Lack of business experience and trying to keep up with big businesses that can afford to purchase items soo much cheaper in bulk. There is a zillion reasons why small businesses fail, I would do some research to find out more.

Answer 6

Because, as the old saying goes: They fail to plan, and when you fail to plan, you most certainly plan to fail. Get the idea? You wouldn't believe the number of people who try and start a business without writing a Business Plan. Alot of people overlook this crucial step. This and inexperience will cripple a business almost before it gets off the ground.

Answer 7

The fact is that in our modern society everyone is in a hurry, they no longer want to go to multiple shops or wait for good quality work anymore. So, they support large corporations such as walmart where you can purchase everything you could ever want in one stop and generally at a cheap price. The true problem is that the trade off is that you get very poorly made goods, that are made through outsourced businesses (meaning they are produced in foreign countries) further leading to the detriment of our economy simply because it saves time to shop there because you only have to shop there.

Answer 8

Why are so many people so far in debt??

Why do people drive Escalades with 24" wheels while still RENTING an apartment??

Basic personal finance isn't taught well enough in school, let alone business finance.

Also, I agree with the others who said "location" and "marketing" and "cash flow".....

Answer 9

Because the owner does not understand how to run a business. Things such has marketing and knowing whom your customers are and other facts are not taken into effect when they open their businesses.

Answer 10

The business owners are inexperienced and don't have the capital or commitment to see through cash flow problems, or fight competition.

Answer 11

why do so many millionaires go bankrupt? it's because of not managing their money properly, getting into something they have no clue about w/out doing any research, bad decisions, and i could go on, but i think you get the picture.