Business Faliure

Question 1

Financial reasons for business failure

Answer 1

• poor cash flow management
• lack of funds to pay tax bill
• lack of capital - leads to excessive borrowing
• borrowing from expensive sources e.g credit card

Question 2

Poor financial management

Answer 2

• management mistake
• lack of experience
• poor marketing
• poor location
• incorrect pricing

Question 3

Non-financial factors for business failure

Answer 3

• failure to innovate
• poor marketing
• strong pound - costs increase the more manufactured
• competition
• civil unrest- protests
• government policies
• natural disaster