16 REASONS BUSINESSES FAIL – ESWATINIBANK PERSPECTIVE

MBABANE – Unrealistic financial projections and failing to account for cash flow are some of the many reasons why businesses fail along the way.
The EswatiniBank Micro, small and medium enterprise (MSME) department has outlined at least 11 reasons why proposals and businesses fail as far as the banking institution is concerned.

Loopholes

Head of Business Banking (MSME Department) at EswatiniBank Gab’sile Dlamini said as they receive applications for financial assistance from prospective entrepreneurs and already established businesses, they have noted some loopholes that lead to business failure. Dlamini was speaking during the MSMEs and agribusiness forum held at Mavuso Trade and Exhibition Centre last Wednesday. In her presentation, Dlamini said the first reason for proposals and businesses failing was a poor understanding of the business plan, which encompassed the non-viability of the business and a lack of market research.

She shared that others often come with business plans developed by consultants, and the businessperson would come without having read or understood the documents. She said some aspiring business people often submitted business proposals that showed less capability of living, growing, developing or functioning successfully.She said lack of capacity (knowledge/training) is also another reason why businesses fail. Poor performance monitoring, which includes poor record-keeping and proper bank statements, was also cited as more reasons why local businesses fail. Dlamini added that another reason is negative cash flows resulting in a lack of profit.
 

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