WHY DO ENTREPRENEURS FAILS?

N-Axis Software Technologies Pvt.Ltd

CONTENT
Introduction Reasons for failure Administrative problems Financial problems Marketing problems Production problems Pitfalls by Peter Drucker Conclusion

Why people become entrepreneurs

Desire to be ones boss

Desire to succeed financially

Desire for job security

Desire for an improved quality of life

REASONS FOR FAILURE

1. 2. 3. 4. 5. Lack of a proper business idea Lack of preparation Flaws in the business plan Changes in the environment Competition

(CONTD)
6. Changes in government laws 7. Failure to predict the end of the product life cycle 8. Lack of finance 9. Labour unrest 10.Rapid expansion

ADMINISTRATIVE PROBLEMS
Lack of proper planning Poor project implementation Poor management Labour problems Inadequate of technical skill

(CONTD)
Low level of technical skill Lack of strategies Problem of inadequate infrastructure Lack of scientific & industrial research Bureaucratic red tape & regulations

FINANCIAL PROBLEMS
Access to & usage of long-term capital Access to working capital

Recovery of debts
Taxation Cash flow

MARKETING PROMBLEMS
Lack of knowledge about market situations & composition Heavy competition from larger players Inadequate/improper branding

(CONTD)
Poor after sales service Problems in distribution Poor advertising/inadequate advertising Improper sales promotion activities

PRODUCTION PROBLEMS
Raw material shortages Lack of proper capacity utilization Lack of proper quality control

(CONTD)
Lack of utility services or poor utility services Outdated technology Non standardized products & processes

INFORMATION TECHNOLOGY
Helps entrepreneurs work quickly and efficiently, provide attentive customer service, increase sales, and project professional images. Entrepreneurs also produce and market products that apply new information technology. Internet also presents a challenge because customers can check prices and buy online from large or small companies anywhere in the world.

PITFALLS BY PETER DRUCKER

The better a man is, the more mistakes he will make, for the more new things he will try. I would never promote to a top-level job a man who was not making mistakes . . . otherwise he is sure to be mediocre.

CONCLUSION
Failure is an opportunity for learning. Business Success is dependent upon reactions of business failures Knowing what can go wrong is essential to avoid business failure Success and Failure exist in relation to expectations Most causes of failure are under the control of the entrepreneur. Entrepreneurs can avoid venture failures by managing known causes of failures which are under their control.

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