A large number of small businesses fail within the first two years - Edexcel - GCSE Business - Question 16 - 2016 - Paper 1
Question 16
A large number of small businesses fail within the first two years.
Identify two reasons why so many small businesses fail in the first two years.
Select two answe... show full transcript
Worked Solution & Example Answer:A large number of small businesses fail within the first two years - Edexcel - GCSE Business - Question 16 - 2016 - Paper 1
Step 1
B Product not customer orientated
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Answer
One significant reason small businesses fail is that their products or services do not meet customer needs or preferences. Without a strong customer focus, businesses struggle to attract or retain clients, leading to low sales and eventual failure.
Step 2
E Rapid growth and over expansion
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Answer
Another reason for failure is rapid growth leading to over expansion. Small businesses often underestimate the resources required for expansion and may stretch themselves too thin, resulting in financial instability and operational inefficiencies.
