GUEST POST: WHY SMALL BUSINESSES FAIL?

My featured guest blogger is John Azumah. John is a friend – the annoying kind. He is free, open minded, and a brutally honest person. He works as a Lab Technician with OCP Africa. John wants small businesses and start-ups to succeed and grow, and he believes they can if they make the right decisions and adapt the appropriate strategies. In this blog, he tells us why small start-ups or businesses fail, and also how they can succeed?

The definition of a small business is sometimes used interchangeably as SMEs (Small and Medium scale Enterprises) and vary among different countries. The Ghana statistical service considers an organization with less than ten employees as a small scale enterprise, whereas the National Board for Small Scale industries (NBSSI) prefers to expand the scope and criteria by accessing the value of the fixed assets (not exceeding a thousand Ghana cedis) of an organization and the number of employees (six to twenty- nine) it employs. Small enterprises or businesses make up to seventy-five (75%) to ninety percent (90%) of the total businesses in Ghana. A story cited in the 18th June, 2018 issue of the B&FT (Business and Financial Times) newspaper quoted the Business Development minister, My Ibrahim Awal Mohammed stating; only 15 percent of small businesses go beyond three to five years in this country. Another study also concludes that only forty percent (40%) of Ghanaian businesses survive beyond the first five years of operation (Amoako-Mensah, 2013). It can be concluded from the remarks of both the Minister and the study that majority of small businesses fail after the first year of operation. This failure can be attributed to common reasons like: lack of business or industrial experience, uncontrolled growth, insufficient capital and poor access to credit facilities, personal use of business funds, poor management and inability to compete with established and pre-existing brands and businesses. These factors can lead to common symptoms like high cost of running business and credit problems.

In this blog we would explore these causes and symptoms, and examine the decisions and principles that helped the 15% percent of small businesses to survive. Most successful companies are known to employ staff with experience and skills essential to the delivery of their products and services to their client. Richard Branson, founder of many successful business ventures such as Virgin Atlantic sums the importance of business experience in a beautiful metaphor; entrepreneurship is like riding a rollercoaster. It can be messy and chaotic. Having business experience can make the whole ride less chaotic and messy. Although it is possible for entrepreneurs to be successful in a business in which they had little or no prior experience; those with an appreciable amount of experience in same venture tend to have a head start and more likely to succeed in the same venture.

To continue reading please click this link πŸ‘‰ senyoinspires.com

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4 thoughts on “GUEST POST: WHY SMALL BUSINESSES FAIL?

  1. Great piece

    Liked by 1 person

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