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I  discovered that the rate at which small and medium scale businesses most especially in Nigeria failed is very alarming; Some of its causes can be traced to the following;

1. Lack of Entrepreneurial Skill
I will prefer to call this the major reason why small businesses fail. An entrepreneur is the head and pilot of the business. When an entrepreneur lacks the necessary skills such as leadership skill, cash flow management, sales etc; such an entrepreneur is bound to fail.
2. Lack of Adequate  Capital
Raising capital is the primary duty of an entrepreneur because cash flow is the life blood of business. No business can survive without enough money to operate daily. Insufficient capital can kill even the most profitable business. In a case where there is insufficient capital and the business is finding it difficult to access funds from bank and investors; the entrepreneur must resolve to bootstrap financing, which is working with the limited cash, eliminating unnecessary expenses, establishing a credit line from suppliers and producing only on demand to avoid tying up resources
3.  Wrong Business Decision/Knowledge
This is very common among the entrepreneurials of today, It begins when an entrepreneur decides to establish a business which he/she doesn’t has its knowledge. Sometime ago a friend of mine, after carrying out critical analysis on a particular situation came up with a decision he considered favorable. But on implementing that decision, it back fired and at the end of the day. So whenever you have decided on an action to be implemented on your business, consider asking friends, business partners and professionals for advice.
4. Lack of managerial skills
Building a business without the necessary managerial skill in place is a futile adventure. An entrepreneur who wants to succeed in the business must be able to effectively handle the employees, cash flow, production line etc and also must be able to hire a good manager to run the business because when there is lack the necessary managerial skills required to drive the business to greater heights, that business is bound to fail.

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5. Unstable Government Policies
This usually affects both big and small businesses. As an entrepreneur, you must be able to protect your business against government changing in fiscal and monetary policies. You must be prepared to quickly adjust your business in order to prevent it from being hit by the adverse unfavourable and unstable government policies. For example you must be well guard against business taxes, double taxation, duties and levies, inflation, exchange rates etc.
6. Inability to Upgrade to the latest Technology
As an entrepreneur you must be able to upgrade to the latest technology as it’s very constant. As an entrepreneur, you must be on your toes sniffing the air for available trends and new technologies you can take advantage of. Examples of great industrial trends and technologies are computers, e-marketing, e-shops on the internet, automated accounting, e-payment and so on.
7. Inexperienced Management
This is the major reason why small businesses fail to survive. The influence of management on business success cannot be undetermined. Most small and medium scale business are privately owned, and this can affect the choice of who makes relevant decisions. The decision about who manages these businesses is influenced by relationships without respect to experience and business skills. This can ultimately bring down the business in the long run.
8. Fierce Competition
“In business, the competition will bite you if you keep running. If you stand still, they will swallow you’’ (Victor Kiam.) Competition is very common and it’s unavoidable irrespective of your business type. I realized that most small scale business owners are afraid of competition, I want to let you know that even if you are the inventor of an idea, that will not stop competitors from coming in. So your best bet is to keep an eye on your competitors, utilize every available innovative idea and make your customers happy. You can also implement some of the best protective firewalls like Trademarks, Patents and Copyrights.

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9. Wrong Business Location
The location of a business is such an important factor that can never be over emphasized. If your business is located in an interior area than your competitor’s, you are bound to fail. Factors to consider when choosing a business location are road network, nearness to high traffic zone, accessibility and patronage level of customers, population, demographics and so on. For example, imagine a business that sells motivational books located in brothel. What do you expect? Nothing but outright failure.
10. Bad Debt
This also contributes to the failure of small scale business. When a business is owed much as a result of free credit line to customer, that business is bound to fail. One key role of an entrepreneur is to keep an eagle eye on the cash flow. Since a business must never be short of cash and customers too must be kept loyal, the business owner must establish a certain credit limit and a fixed time from date of purchase to pay up.

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