Why do many small businesses fail? Reasons Many Small Businesses Fail Here, 01 are real. This should be uppermost in the minds of wannabe entrepreneurs and new start-ups. A great number of small businesses fail in their first 1 to 2 years of existence or operation.
Certainly, many small businesses fail because of many factors and reasons some of them are brought about by the entrepreneur himself while others are caused by the environment. It is the primary duty of the person starting the business to analyze WHY he will either fail or succeed in the business. He will then move on to put things in place.
Many small businesses fail because they don’t understand the importance of SWOT analysis. SWOT analysis involves understanding the strengths, weaknesses, opportunities, and threats of the business. This goes by extension to the SWOT of the entrepreneur and visionary. If they do this well, then they can avoid failure.
When Pickens Boune said “There are no disasters in business that you can’t avoid if you see them coming and make the adjustments,” he meant that if you do your homework very well, you will always avoid certain issues.
As a trainer and capacity developer in Leadership, Entrepreneurship, and Management, this writer has put together a list of reasons why many small businesses fail in Nigeria. See these 1 and 2. 
1. Businesses Fail because of Lack of Managerial Skill
One of the most important aspects of succeeding in a business is managerial skills. Therefore, it is one of the reasons why many small businesses fail. When an entrepreneur cannot manage human (i.e., manpower and management), money, machine, and material resources at his disposal, then failure becomes inevitable and imminent.
An entrepreneur must be able to manage the employees, cash flow, production line, and other aspects of the business. That’s what constitutes an organization’s 5M – Management, Manpower, Machine, Material, and Money. If he can’t handle all of this together, he should hire a good manager to do that for him. Another reason is:
2. Businesses Fail Because of Wrong Business Decisions
See what the Mafia Manager (in case you know the book) has to say about decision-making, “Before making an important decision, get as much as you can of the best information available and review it carefully, analyze it and draw up worst-case scenarios. Add up the plus or minus factors, discuss it with your team, and do what your guts tell you to do.”
Many small businesses fail because of the very many wrong decisions made by their owners. Be careful and tactical with your decisions. Wrong decisions lead to wrong investments, wrong loan collection, wrong employees and so many other wrong things.
He is a trainer and capacity developer, author, and speaker in Leadership, Entrepreneurship, and Management. Dr Mike Ihezuo has put together this list of reasons why many small businesses fail in Nigeria. He can be reached on the CONTACT.
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