6. WHAT IS BUSINESS FAILURE ?
Business failure refers to a company ceasing operation
following its inability to make a profit or bring out
enough revenue to cover its expenditures. Profitable
business can fail if it does not generate adequate
cash flow to meet expenses
7. 02. PRESENT TREND OF THE BUSINESS IN JAFFNA
•There is no remarkable progress in the development of Small
businesses in Jaffna.
•very poor growth of small enterprises in Jaffna.
•Increasing no of suzettes
•Higher expansion
•More competition
•Increased costs
•Questionability of financing
•Minimum life of survival
8. 1. Good Strategy
2. Good Employees
3. Outstanding Leaders
4. Location
5. Marketing strategy
6. Proper controlling system
7. finance management policy
9. 1. Insufficient funds to sustain the business
2. Lack of experience and lack of confidence in running the
business
3. Lack of Advertising
4. Market competition
5. Lack of skill in recruiting the right people to work
6. Lack of financial management skills
7. Lack of skills to run the business
10. 8. Undercut market activities
9. Business expanding
10. Dummy product with lack of quality
11. Theft and fraud
12. Lack of accounting knowledge
13. Lack of monitoring and controlling
14. More withdrawal for individual use of owner
15. Cheque issues
16. Lack of loan management skill
13. From our analyzing, we find out
No remarkable progress in the development of Small business i
The most businesses still operate in shut down condition
we identified the reason for the business failure
Such as follows:-
•Increasing payment of Interest on loans and overdraft
• banks restricts overdraft facilities
•Low Profit Margin due to Competition
• Delay in Collecting Payments
• Frauds/Pilfering
• Lack of Material Control Systems
• Poor Monitoring and Control
• poor advertisement and motivating
•Lack of customer relations
14. 08.RECOMMENDATIONS
The following under listed recommendations are to be considered in the
set up of business activities to reduce and avoid the risks of failure.
•Access funds from other sources other than banks where the
cost of capital is low.
•Managers should ensure that almost always they have a team
leader at the industry
•Proper monitoring and control measures in place of business
•Business must keep proper accounting practices
•Business must make proper marketing to achieve customers.
•Build up good customers relations
•Reduce undercut market via trade unions
•Discriminate product from others
15. REFERENCES
•An investigation into small business failures with specific reference to
retrenched telkom employees in the far west rand (mogale city,
randfontein and soweto) By Njanyana richard mabaso MARCH 2008
Http://succeedasyourownboss.com/03/2013/8-reasons-why-small-
businesses-fail/#sthash.ymaevava.dpuf
Http://uk.businessesforsale.com/uk/the-top-ten-reasons-why-businesses-
fail.aspx
Http://mystrategicplan.com/resources/ten-common-causes-of-business-
failure/#sthash.lmxiqdus.dpuf
