business growth and decline

Question 1

what are the stages of life of a business

Answer 1

• establishment (beginning of business)
• growth (increased sales and new products)
• maturity (sales slow down & no room in market to keep selling)
• post-maturity (renewal or decline)

Question 2

why do businesses decline?

Answer 2

lack of management expertise
not enough funds
not meeting consumer needs
competition

Question 3

what is cessation

Answer 3

the termination or discontinuation of business operations, whether temporarily or permanently

Question 4

what is liquidation

Answer 4

the process of winding up a company’s affairs, often when it’s insolvent (unable to pay debts) or nearing insolvency, by selling its assets to repay debts to creditors, employees, and shareholders

Question 5

what are the reasons for decline

Answer 5

Ill-conceived business idea

Failure to meet customer’s needs

Lack of demand for the product

Failure to plan

Increased competition

Lack of adequate cash flow

Poor location

Lack of management skills

Uncontrolled growth

Failure to adapt to changes in external environment

Failure to price product correctly

Unfavourable economic conditions

Ignorance of existing competition