Accounting - Reasons for Success and Failure

Question 1

What do successful small businesses have?

Answer 1

• A high demand for their product or service
• A location that is visible and easily accessible
• A thorough business plan that details all of the operations
• Sufficient starting capital

Question 2

What qualities might a successful business owner have?

Answer 2

• A strong knowledge of the service/product they are providing
• Business Acumen - insight or good judgement when it comes to business dealings
• Humility - Being able to seek assistance
• Friendly and Fair

Question 3

Why do small businesses fail?

Answer 3

Competition from small and large businesses
- Some businesses will purposefully cut prices to drive out new competitors, since they can afford to while small businesses cannot

Question 4

What is another reason small businesses fail?

Answer 4

A poor location
- Poor visibility or poor access in terms of parking
Insufficient start-up capital to support the business.
- Initial capital not only needs to cover the start-up cost but the operating and the ongoing expenses that come with running a business