Explain why small businesses often fail and what can be done to help avert failure.

Some of the reasons for small business failure are: lack of experience (not having sufficient know-how to run a business operation in the chosen market or area), lack of expertise (not having expertise in the essentials of business operations, including finance, purchasing, selling and production), lack of strategy and strategic leadership (not taking the time to craft a vision and mission, and formulate and properly implement strategy), poor financial control (not keeping track of the numbers and failure to control business finance), growing too fast (not taking the time to consolidate a position, fine tune the organisation, and systematically meet the challenges of growth), lack of commitment (not devoting enough time to the requirements of running a competitive business) and ethical failure (falling prey to temptations of fraud, deception and embezzlement). Students should take each of these reasons for failure and come up with suggestions how entrepreneurs can avoid these pitfalls. They can use examples form the business world and their personal experiences to illustrate each of these suggestions.