Business Failure Flashcards
1
Q
Why may a business fail in the short term?
A
Does not have enough cash to pay the bills
2
Q
Internal reasons why a business may fail
A
- marketing failure
- financial failure
- systems or operations failure
3
Q
External reason why a business may fail
A
- change in technology
- new competitor
- economic change
- behaviour of banks
4
Q
How marketing mistakes lead to business failure?
A
Problems understanding changes in the market place, or even consumers are really looking for, will lead to a shortage of revenue
5
Q
How consistent stock problems lead to business failure?
A
Not enough stock leads to less sales therefore less revenue. Too much stock means less money to cover daily expenses e.g rent
6
Q
What is business failure?
A
Refers to a company ceasing operations following its inability to make a profit or to bring in enough revenue to cover its expenses
