Which of the following is a reason why new businesses often fail in their first year?

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Question

Which of the following is a reason why new businesses often fail in their first year?

Accepted Answer

The business runs out of cash to pay its day-to-day expenses — Running out of cash (poor cash flow management) is one of the most common reasons new businesses fail in their first year. Operating in the private sector is not a cause of failure. Identifying a gap in the market is a positive factor. Producing a product customers want increases the chance of success.

Answer

The entrepreneur identifies a gap in the market

Answer

The business runs out of cash to pay its day-to-day expenses

Answer

The business operates in the private sector

Answer

The business produces a product that customers want to buy

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