- Created by: keithpettifer325
- Created on: 22-11-18 09:09
2.3.3 Business Failure - Revision Notes
- Poor cash flow management
- Lack of funds to pay tax
- Borrowing from expensive sources of finance (such as credit cards
Poor Working Capital Managment - Internal
- This is critical if a business is to survive
- Working capital performance is a measure of effiecieny that compares a business' liabilities to it's assets.
- Inablity to manage cash-flow is the most common reason that business' fail, this is because businesses then don't have enough money to pay their bills.
Poor Marketing - Internal
- Poor marketing is a main reason to why business' can fail.
- If customers are lied to by a company it can give that business a very bad brand image.
Failure to Innovate - Internal
- Most dynamic businesses have to keep up with the constantly changing market, if they don't, they can risk becoming outdated and therefore lose customers to no inovation.
- If a business innovates products in the wring way, then it can cause a business to lose customers to close competitiors.
- Kodak is an example of whom failed to innovate their cameras…