Topic: Business failure among small-scale entrepreneurs - page 14. (Read 3156 times)

You sound like a motivator, but business success is beyond that. Many factors have to be considered before success could be made in any business irrespective of the scale of the business. The first and most important of the factors is the resources at hand, are the needed money and human capital adequately available? It is also important to consider the location of the business, you might be entirely a failure if your business is located wrongly or targeted towards the wrong people. While the management of the business is important, the creativity of the entrepreneur, the employee and marketability are also crucial.

When the market is in recession, people tighten their wallets, slow days of business,... usually small-scale companies go first. It is not really that surprising, considering small-scale businesses typically don't have enough funds to operate at a net loss for a long. So you'll see downsizing, forced to close down for small-scale companies and niche businesses first, big one goes later. Tho, it was also a matter of cutting losses as small-scale ones don't have the potential to sell off themselves to investors like big-scale ones.

It's a shame indeed, when a business that has been built with great difficulty actually has to fail in the end, even though they actually had a boom at the beginning of their existence.
and at the beginning of their presence they carried out promotions so vigorously. so fans keep coming.
but unfortunately the promotion they do is not developed or too monotonous. so people get bored and switch to other options.

we also need to know to make a business so that it can survive in a very tight competition then there are several things that need to be our focus such as:

1. Consistent in running the Promotion.
Even though our business products or services have been widely known, it does not mean we have to reduce the level of promotion of our business. because if we look at big companies like Amazon etc. we can see their promotion continues to be done consistently. because they know they need new customers every day.

2. innovate and adapt to the trend.
whether small business or big business, if they cannot adapt and innovate by following the trend, it is certain that their customers will run away and will move to another place that understands trends better and has adapted to the environment and trends that are happening.

3. Identify your business competitors.
This is necessary for your own business evaluation material. And don't abuse this by creating a strategy that imitates your competitors. but make a strategy that is better than your competitors. because today's business competition is so tight, this step is a step that must be considered important.

4. Continue to improve the best service to consumers.
making consumers comfortable and addicted to our products and services is the main thing so that a consumer will continue to subscribe to using our services and business products.

and many more of course things that must be done in order to make a business so that it continues to survive in this era of intense competition. please add by all friends.

Funds are the problem that business go through may be mismanagement will course it to close up or it is in shortage of fund. Small business owners most times lack professional knowledge to run them and don't have fund to higher good workers that will help to move the business into another level. They can't secure loan from bank to finance the business and gradually it go down when the owner is late.

Its not undeniable that those who stay for long in the business whether it’s small scale or big time businesses have their own formula or strategy that makes them successful. That’s one thing that make them overcome all their struggles because they have a working strategy or formula that sustain the business profits. Otherwise, if they keep on failing, then it’s hard to see entrepreneurs last long in the business industry.

You know what that competition causes? The lack of profits and only the aim of growing their worth. Because these days companies do not want to aim at making a profit, they aim at being worth a lot. If you have zero profits, in fact if you are making bigger and bigger debts and growing your losses bigger, but if your companies networth grows bigger than your debt? That's fine.

So, let's assume you have a company worth 10 million dollars but have a debt of 5 million, that's fine, and if you grow and have 20 million networth but 10 million debt that's fine and you could keep growing like that. "Exit strategy" is a term that grew too big, and that causes them to fail.

You are bringing an important point, when it comes to tech companies there are huge monopolies that governments simply do not touch out of convenience as they are working hand in hand to obtain information from their citizens that way, and as such new projects have almost no chance of competing against them, and even if they could those monopolies end up buying them anyway, so until something is done about this it is going to be very difficult for small startups succeed.

The competition is high and there is a huge monopoly that prevents new startups to succeed. Only when the government move to end this monopoly (particularly in Africa) will startups able to survive.
The cost of production as a startup is very high because of limited capital, unlike the big businesses who can get same materials at a huge discount from buying in bulk.
Then there is government policies which are too stiff for startups to meet and at the end 90% will not be able to survive.
The government has a big role to play for the survival of small scale business otherwise the story will remain the same.

I'm sure the companies you mentioned above also must have planned and designed a good plan and must have been careful,
but in the end they closed or went bankrupt, why?

I explain, there are also two types of bankruptcy

- due to financial failure
- due to economic failure

financial failure
caused by the company lack of cash or capital funds for operational activities. To prevent this financial failure, the company can use some of the asset liability management.

economic failure
This is because the company loses revenue so that it is unable to finance its operational costs, meaning that the company's profit level is much less than the cost of capital or the value of the company's cash flow is smaller than liabilities.

and that triggered the failure above that
caused by
- Wrong financial management
- lack of innovation
- Lack of capitalization of funds
- Putting trust in the wrong people
- the company has too much debt
- the point is less thorough and careful in every action.

To be fair, owners of these startups have huge balls to begin their operation in industries that are either overly saturated or no business has even been yet. In school, we are taught that 90% or even 95% of these startups are doomed to fail, either because of mismanagement, tight competition, or both. Those who managed to break out of the norm gain some success, and it's still a very crucial point for them because they are expanding and they are using more resources than ever.


The government would only love working for those big businesses because they bring in more money. Banks and governments can even bail these big businesses out if they needed to, because they needed that extra boost from those huge corporations. Startups are always left to fend for themselves but in a business and practical standpoint, it's better to throw money on something that already proved something and is still capable of profiting rather than throw money on something that is highly uncertain and hasn't proven anything yet.

When you started a business from a debt, its hard to expect initial success from it because all you will prioritize is to pay the debt first  and after that, that's the time you can completely focus to make your business grow. Sad to say, even big entrepreneurs engaged in debt, some have managed to secure finances more than paying their debt while others end up in bankcruptcy due to unable to secure profits and unable to pay their debt.

In my country a big number of startups got into existence as a result of some schemes initiated by the government. Later this turned to be mere schemes and the government failed to provide consistent support in all levels, particularly in finance. This have caused a big percentage of startups end and very few are sustaining. The governments have got big responsibility in the development of the people through entrepreneurship. Most of the time government work for the corporate that are once a strat-up.

These young entrepreneurs may not gain instant profits from their businesses for sure, they certainly have gained lot of losses at first. But business is business, if you can’t stand from your losses and you won’t be able to recover from it, your business will surely bound to fall. However, only few of them managed to overcome the trials and continue to experience business prosperity. The reason might be they have built good strategies throughout the years to run their business successfully and they were able to meet the demands of their regular and new customers.

There's no exemption and this should really be applied in all business is that as an owner then you should really be mindful when it comes to non-stop innovation or changes so that your competition wont really be

able to overtake you when it comes to innovation and changes which could possibly overtake and replace your business when it comes to ranking.This is why it would really be that normal that you should really

be thinking for something new or changes which would retain up your users or do still create that interest and make them coming back into your service/platform, because if they
do find out these changes or new things on other places then expect on what would be the next.

One thing all these startups have in common is that they are based in Africa. The government doesn’t do much to encourage tech startups, their rigid policies and systems tear down innovative business before they begin. In the end, they give room for foreign products to flourish in their country instead of patronizing their own. OLX was popular at some point, I think I had an account with them but I can’t remember using the service. Jiji and Jumia offer the same service and they are popular in Nigeria. I’m not sure what went wrong with OLX, they had good publicity at the beginning. The competition for the services they offer is high, I think they should focus on improving their customer base in South Africa before increasing their reach to other countries.

OLX in my area is now a little dim because it can't compete with other startups such as, for example, Shoppe, Tokopedia, Lazada, TikTok they have started well and can survive until now so there are many enthusiasts because of their extensive marketing and the features that are expressed are so good. that is felt by the community and this has become a lot of people's choices for buying and selling at the startup.

There is a friend of mine who uses OLX, he sell/buy used cars, but he said OLX is now not like it used to be that many enthusiasts are now left behind so that the buying and selling they trade there is no longer a buyer, it becomes quiet and it is difficult to sell there, but that's a little Complaints about failed businesses for small circles, any of them are still basically we ourselves can do several things so as not to fail.

Indeed that OLX is still breathing and it's also true that they lack of marketing because I didn't see them appear in the ads online other than those recent companies whose concepts are also similar to theirs (buying and selling). I think that is a sign that their company's budget is getting low but did you know that OLX is one of the biggest buy and sell site before? I remember they are being advertised left and right and they even have advertising on the local television. That's how successful they are but unfortunately, they ended up on this.

It's not that the saying is true that all good things has an end because there are also old companies which are still at the top up until today. Maybe they only got carried away of their fame and then they start doing things which are inappropriate. This is a common mistake of those who experience a success.

That’s going to be a problem up until a point, but then you come at a crossroad that you have to decide yourself. I know a friend’s father who started that way, back in the 80's he worked insanely, and then during 90's he worked quite a lot as well, but after 2004 he retired while keeping the company, he just hired a CEO or general manager or whatever you want to call it and gave him both a salary and also bonus depending on the company profits and ever since 2004 that dude has been retired on an island with my friends mom, and husband and wife they end up just relaxing all day every day.

That’s not impossible neither but you can't just hire someone straight off, you need to build the company to a good level before you can afford that.

It will depend on countries, OLX is no longer popular in my country but it used to be before Shopee and Lazada came. There is a need for a business to expand or develop when its competitors are.Sometimes they need to do more advancement in their features and not just stick on what they know like how Nokia lose its popularity over other cellphone companies now.

Mismanagement of funds and poor management are the major challenge in a business. For a business to succeed, first you don't think of using business funds for basic needs or for pleasure. Secondly you should always have a good customer relationship, so that if your product is reducing in quality, they will be the one to let you know by complaining with this your product will be competitive in the market.

Thirdly, motivation of employees helps a lot,let them know they are the best workers you have ever work with,and give them bonuses for work well done. Fourthly, you should know the risk in the business so that you can learn the risk management.Using borrowed funds is also a big challenge