Assessing business start-ups

Question 1

3 reasons why start ups can be risky and why it may fail.

Answer 1

• poor cash-flow management,
• lack of effective planning,
• lack of finance to fund the competitors.

Question 2

3 Possible reasons to identify the strengths and weaknesses of the business.

Answer 2

• customers’ needs and wants, and which market segment to target.
• the risks involved
• finance for day-to-day and longer term operations

Question 3

Why would finance be a reason for business failure?

Answer 3

because of raising funds, problems of cash flow, uncertainty about costs and profitability

Question 4

Why would external factors be a reason for business failure?

Answer 4

because of complying with regulations, the impact of macroeconomic policies including interest rates and taxation and the competitive environment where business operates.