Why Some Small Businesses Fail In Ghana 2021

By | December 28, 2021
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It has been the desire of each and every business firm to gain a strong presence in its locality — for everyday sales and income. So, businesses develop a well-structure and play a strategic role in growing the company in the near future.

Most businesses along the way, turn away from their goals a d begin to see failure in the business journey.

With this article, we shall give you much information you may need to know about why a small business fail in its operation in Ghana.

This article can be useful about some of the reasons Why Some Small Businesses Fail In Ghana 2021.


Some of the reasons why start-up fail is the inability to situate in a good area for business. Sometimes some organizations are located far away from raw materials and factors of production like labour. If a fast food is located close to a bank, the business will thrive and if a boat manufacturer is located in the neighbourhood there will hardly be sales because it is not a riverine area.


Mismanagement of business of business fund is a big problem that causes stunted growth. If a business begins to make profit, part of it should be reserved for the future plan and continous existence. At least 40% should be added back to the capital and not misused by the business owner for luxurious spending.


So many small businesses have this problem as there number one, because it is the capital that will make provision for office and equipment, staffing, cost of production and advertising. Sometimes start-ups need good capital depending on the plan of the business for instance, you cannot run a cyber cafe with as low as a hundred thousand naira. You would have to consider the cost of getting an office that is the rent, then the computers, printers, ISP(Internet service provider), furniture etc.


Where a business owner fails to make a good plan there would be failure in the long run of the business and this is as a result of inexperience, also if a businessman does not understand the kind of business to do and how to manage people very well there would be problems. Inability to convince investors with a good business plan and a proposal is going to be a big problem, a business person should enjoy and be passionate about his or her business.


Sometimes some companies have made mistakes in the area of acquiring gadgets, machinery and buildings. If an upcoming business should have over sufficient space and they paying for the rent, it affects the size of their capital because such space is not used to give them extra income. It is dangerous to have excessive working equipment and over staffing.


Some business cannot cope with the rising effects of competition in their area of specification, because of lack of good planning strategy which could sometimes be as a result of piggy-backing. Piggybacking means depending on a bigger business for survival, some businesses find it difficult to build their brand and differentiate themselves from the crowd which a problem and one of the biggest reasons small businesses fail.

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