business failures

ACC-3134 STRATEGIC MANAGEMENT ACC-3134 STRATEGIC MANAGEMENT

ACCOUNTINGACCOUNTING

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Topics to be discussed…..

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

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

1. Good Strategy

2. Good Employees

3. Outstanding Leaders

4. Location

5. Marketing strategy

6. Proper controlling system

7. finance management policy

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

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

06. People involve in business failure

From our analyzing, we find out No remarkable progress in the development of Small business in JaffnaThe 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

08.RECOMMENDATIONSThe 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

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