1. Reasons why small businesses might fail

1. Overexpansion: A leading cause of business failure, overexpansion often happens when small business owners confuse success with how fast they can expand their business. A focus on slow and steady growth is optimum. Many a bankruptcy has been caused by rapidly expanding Companies
2. Lack of Planning: It is critical for all businesses to have a business plan. Many small businesses fail because of fundamental shortcomings in their business planning. It must be realistic and based on accurate, current information and educated projections for the future.
3. Insufficient Capital: A common fatal mistake for many failed businesses is having insufficient operating funds. Small business owners underestimate how much money is needed and they are forced to close. before they even have had a fair chance to succeed. They also may have an unrealistic expectation of incoming revenues from sales.
4. Poor Management: Most of the small business owners frequently lack relevant business and management expertise in areas such as finance, purchasing, selling, production, and hiring and managing employees. Unless they recognize what they don’t do well, and seek help, business owners may soon face disaster. They must also be educated and alert to fraud, and put into place measures to avoid it.