Question

What is the primary reason that so many new businesses fail? A. Owner does not work hard enough B. Mismanagement resulting from lack of business know-how C. Low employee quality for new businesses D. Lack of brand-name recognition E. Inability to compete with well-established brand names

Answer 1

Answer:

The correct answer is letter "B": Mismanagement resulting from lack of business know-how.

Explanation:

The Small Business Administration (SBA) says half start-ups go under within their first five (5) years. The main reason for such statistics: mismanagement and lack of business know-how. Most entrepreneurs engage in the business world without having received enough education. This leads to people starting companies without even making market research neither outlining a strategic plan with contingency strategies.  

Most small businesses are opened because of the operating expertise in the owners who overestimate their technical knowledge and forget about the managerial skills necessary to run an organization.