Factors that influence failure in entrepreneurship

Monday
Date:May 2, 2022

Knowing the cause of failure in a business early on is an advantage so you can find ways to anticipate it. The causes of failure experienced by entrepreneurs also vary. What are the failure factors?

Knowing the causes of business failure early on is an advantage in itself so that we can find ways to anticipate them. Indeed, failure in the business world is a natural thing and can happen to anyone.

The causes of failure experienced by entrepreneurs vary, both from internal and external factors.

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In general, the following are factors that cause the failure of a business and must be considered.

1. Lack of management experience

Many entrepreneurs do not fully understand the difficulty of operating a business. There are some entrepreneurs who will run a business, but do not know how to manage it.

When problems arise, they are unable to solve them. For example, entrepreneurs with a background in Engineering Education have the ability to design products, but lack an understanding of accounting, finance, marketing, and sales. If this is allowed it can lead to business failure.

2. Less able to make financial planning

Entrepreneurs who think they will have sufficient capital in the first years of their business will run out of capital before the end of the first year.

The preparation of an unbalanced budget can result in loss. So, you also have to pay attention to the use of capital for the present and the future.

3. Not innovating according to the times

Lack of innovation and lack of development causes this business to lose its market. And efforts that do not keep up with the times will eventually be lost to time.

4. Selling products that people don't often look for

One of the causes of the failure of a business is the product being sold. Selling a product that not only many people need can lead to failure. Don't let your business fail because you choose the wrong product to sell. So, it is important to analyze the market first.

5. Wrong choice of mentor and unwilling to learn from others

Entrepreneurs definitely need a mentor, you need to learn from people who have been successful, have been successful, have failed, and even often fail.

Learning from the mistakes of others is one of the important things to develop a business. However, if you want to find a mentor, then you should choose the right one.

Those are some of the factors that can be the cause of entrepreneurial failure. For those of you who are going to run a business, try to pay attention to these things again so that later your business will run smoothly.

• Lead image from unsplash