Recently I was informed that the clothing store ( will be referred to as “N”) which I used to worked went bankrupt. Honestly, I was not surprised when I found out. With numerous problems occurring at the same time, being bankrupted is just a matter of time. Referring to what we learned in business fundamental, failure of small business can be caused by many factors. Lack of research and over expansion are they main reasons that caused the store to go down hill.
Like many other business owners in the field, my former boss mistaken success with how fast she can expand her business. Within one year, three chain stores were opened in different areas. Without establishing solid customer base and good cash flow, the profits made in the original store just could not keep up with the losses from other locations.
Also, the company failed on forecasting due to lack of research and planning. Nowadays, customers’ demands can change rapidly. It is hard to predict what they want. But instead of conducting researches on previous data to estimate the possible outcomes, the owner just imported products that she likes.
I believe these are the reasons that led to bankruptcy for “N”.
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