2.3.3 - Business Failure

Question 1

What are 6 internal causes of business failure?

Answer 1

• failure to understand market
• poor planning
• poor decision making
• badly organised
• overtrading
• non viable idea

Question 2

What are 4 external causes of business failure?

Answer 2

• economic environment
• changing social trends
• demographic changes
• political environment

Question 3

What are 5 financial causes of business failure?

Answer 3

• inability to pay bills
• liabilities outweigh assets
• failure to break even
• cash flow crisis
• overtrading

Question 4

What are 6 non financial causes of business failure?

Answer 4

• slow loss of long term competitiveness
• sudden lurch in sales towards competitors
• unmotivated staff
• IT fails
• bad customer experiences
• poor management