Business Failure and Bankruptcy

[sweetieM]

There are reasons why a certain business failed and was declared bankrupt. Is this intentional or not? There will be factors affecting business failure leading to bankruptcy. Although only very few experienced business failures, the fact remains that it gives frustration on the part of the business owner. Well, we cannot judge them as negligent and abusive, only they knew better than us. But there are possible reasons why businesses big and small failed leading to bankruptcy/ There are businesses that failed in one or few aspects but for a bankrupted business, it means something.

There are reasons cited by experts why a certain business failed and bankrupt. 1. Lack of experience 2. insufficient capital 3. Poor location 5. over investment in fixed assets 6. Poor inventory 7. Personal use of business funds 8. Unexpected growth. 9. Competition and 10. Low sales. It is a must to check the location if the people living there can support your business, if not, it will cause low sales, thus tempting you to use the business funds for your family’s needs.

 

[Suba]

A business is said to be bankrupt if it loses the ability to run a business and is unable to pay debts. Meanwhile, a bankrupt business is determined by a court decision to liquidate an asset to pay debts. We can find low solvency in financial analysis, namely the ability to pay debts both short term and long term.

There are at least two factors that can make a business bankrupt.
The first is internal factors such as bad management, bad financial practices, bad marketing and lack of capital.

Both external factors, such as theft, fire, high inflation rates, natural disasters etc.

If the cause of bankruptcy is from external factors, you can ask for help from a bank or investor to start a new business, but if your business bankruptcy is caused by internal factors, then you need help from an expert, such as a business consultant. to find the source of the problems that led to bankruptcy.

 

[Augusta]

Businesses a lot of times go through bankruptcy because of both internal and external factors which is why it is good for business to always take precautions. There are alot of reasons why this happens

Some of the reasons as you have mentioned include Lack of experience, insufficient capital, Poor location, over investment in fixed assets, Poor inventory and even

It is good to also consider one's Personal use of business funds, the Unexpected growth, Competition and Low sales. It is good to check out all these problems and try to avoid them happening to your business to keep it strong.

 

[sweetieM]

There are indeed many reasons why a business suffers a failure that may lead to bankruptcy. It is better for business owners to have additional capital in case a problem arises instantly. Another is f you lack the passion to your business, most probably you will turn sour to make your business grow fat.