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CHAPTER 2
The Roots of the Problem
WHY DO OVER 50% OF SMALL BUSINESS DIE AFTER FIVE YEARS?
Small businesses face numerous challenges, and unfortunately, many do not survive beyond the first few years. Here are ten critical factors for a business to fail.
1. Capital and Cash Flow Problems: Starting with insufficient capital and facing issues like slow sales, poor debt management, or unexpected costs.
2. Lack of Effective Planning: The absence of a solid business plan leads to unclear goals, poor market understanding, and financial instability.
3. Ineffective Management Skills: Limited personnel leads to challenges in finance, marketing, operations, and human resources, which in turn causes inefficient decision-making.
4. Poor Market Research: Not understanding the target market’s needs and behaviours, resulting in unsuitable products or services.
5. Intense Competition: Struggling against larger entities without a distinct selling point or competitive edge.
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