Why Australian Small Businesses Are Failing in Early Stages
According to estimates, Australia currently has around 2.3 million small businesses. Sadly, one in three newly established small businesses in Australia fail in the first year, followed by two out of four by the end of the second year, and three out of four by the end of the fifth. A recent study by the University of Technology, Sydney shows that the following factors are frequently cited as the cause of business failure: poor financial management, bad management, bad record-keeping, issues with sales and marketing, issues with staffing, failure to seek outside counsel, general economic conditions, and personal factors. An in-depth analysis of these findings is instructive. Accounting for 32% of all failures, financial mismanagement is the single leading reason for business failure. Financial mismanagement refers to a number of problems, such as a lack of business experience, cash flow problems, starting with insufficient capital, excessive private draws, excessive cr...