Why some businesses fail...

‘...Establishing and running a business requires vision, mission and goals to be expressively defined in a feasibility study…’

It is common to learn while reading the weeklies or hear from friends that some businesses are being auctioned due to inability to repay their bank loans. It is even worse to hear businesses of some acquaintances are being liquidated.
What is worst of them all is the knowledge one gets that the dying businesses take away in their coffins whatever belonged to the established families in the form of movable and fixed properties.
What are the factors that would prompt such kinds of situations in a much propagated and potentially high market such as our own?
One of the principal sources of business failure in this country is the adventurous pursuit of a business; simplified so lowly that if my neighbor has succeeded in that business so would I. Although such will power or resilience may have worked for some in the history of business development in Ethiopia, it would not serve as a straight and correct path for all, since initial control over or wielding sufficient capital through bank loan can neither solve the root problems of business failure or solvency.
For success in business, the combination of different elements is mandatory. Establishing and running a business requires vision, mission and goals to be expressively defined in a feasibility study. It requires structure and management which include various success monitoring grids such as performance measurement and quality control systems. Then to achieve the goals successfully planning is important. Strategic planning which could be expressed in short and focused operational or business plans that include production or service market plans based on current information flow.
The ignorance of such complex mechanisms or success grids is, in the main, the sources of failure of some businesses. It is silly to think that control over capital alone could bring success to a business before even establishing the simple necessity of account keeping in the perceived or existing office. Many ignore establishing simple but important structure and management systems and dismiss the issue to a bed-side management, once the money is secured from a bank, until it is consumed unconsciously over super-market items, hence mismanaging the money before even entry books are established.
While the above discussion is broad, entrepreneurs fail after start-up because they lack general business know-how and viable concepts. Another reason is a lack of market knowledge. Some would -be entrepreneurs are deterred from entering certain lines of work by what they see as a social stigma and repeat the same line of business that their neighbors run and so are doomed to failure.
The most important element for success, though, is the creation of a business plan, a formal document that contains a statement of purpose, a description of the products or services to be offered, a market analysis, financial projection, and some management procedures designed to attain the business’s goals. Before they write a business plan, however, they must be thoroughly aware of the above-described barriers to business entry.
Above all, as leaders of businesses, they should be able to play the role of the astute and all-versed, capable and strong business manager as opposed to the narrowly-versed incapable and weak manager. A strong and successful business owner or leader is the one who thrives through the power-map and who can distinguish very well between the elements that he can absolutely control and the elements he must influence and those that he must be able to net-work through the concept of the concentric circles that include the absolute, the internal and the external environments or spheres of control.