Thread by @PhumiSkosana

Why do small businesses fail? A question I asked myself many times before I started my business because, like many entrepreneurs who are new in the game, I was terrified of failure.

Here are 7 of the reasons, why small businesses fail: 🧵

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Lack of capital: Small businesses often struggle to secure enough funding to keep the business afloat during the early stages.

Without adequate capital, a business may not be able to pay for necessary expenses like rent, equipment, inventory, and marketing.

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Poor management: Small businesses require careful management of finances, operations, and employees.

Inexperienced or incompetent management can lead to poor decision-making and mismanagement of resources, which can lead to failure.

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Failure to adapt to changes: The business world is constantly evolving, and small businesses that fail to keep up with new trends and technologies risk being left behind.

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Competition: Small businesses often face competition from larger, established companies with more resources and a stronger brand presence.

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Lack of marketing: Without effective marketing, a small business may struggle to attract and retain customers.

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Inadequate planning: Small businesses that fail to plan for the long term may struggle to achieve sustainable growth and profitability.

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Economic downturns: Economic downturns, such as recessions or market crashes, can have a devastating impact on small businesses that lack the resources to weather the storm.

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Managing your money effectively is crucial in avoiding the most painful mistakes in business - read here to learn more:

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