Business Failure

Why did this business close after 146 years?

Why did this restaurant close down?

Why have half of UK nightclubs closed?

Why did this airline fail?

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Internal causes of business failure:

1. Poor efficiency. (Financial)

Costs are too high compared to competition.

Productivity (output per worker / machine) is too low.

2. Poor management of working capital. (Financial)

Current assets  (£'s) minus current liabilities (£'s).

3. Poor marketing. (Non Financial)

Click on the picture for other examples of terrible marketing decisions.

4. A failure to innovate. (Non financial)

This business expert points to internal business failure for Mothercare in the UK:

External causes of business failure:

1. Economic recession (Financial)

Demand for some products may fall dramatically causing cash flow issues. 

2. A strengthening pound (appreciation in the value of the pound).

This would be very bad news for any business that relied on export sales.

More on business failure here.

Business rates can be a huge burden on business.

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Website here.