TITLE:
Why Do Most Small Businesses in Liberia Fail
AUTHORS:
Ahmed Denton
KEYWORDS:
Small Business Failure, Business Management, Liberia
JOURNAL NAME:
Open Journal of Business and Management,
Vol.8 No.4,
July
29,
2020
ABSTRACT: Small businesses are considered to be the backbone of every economy. If
they are not administered effectively, they quickly diminish. There are several
factors that result in small business failure. This study examined the reasons for the failure
of small businesses in Liberia. Data was collected using questionnaire and the
targeted participants were business persons and business students within
Liberia. The study revealed that poor business planning is the main factor
responsible for the failure of most small businesses in Liberia. Most
proprietors of small businesses in Liberia don’t plan properly before the
commencement of a business. They depend on the day to day reality to run the
business which is not good for the future of the business. The study identified
ten contributing factors responsible for the failure of small businesses in
Liberia. Out of the ten contributing factors, five of them were identified as
the top factors. The top five contributing factors include poor business
planning, lack of entrepreneurial skills, lack of customer relations,
management incompetence and inadequate financing. The study recommended that
small business proprietors should conduct a proper business research on the
type of business that is to be established and develop a standard business plan
that covers all the aspects of the business before commencement. The study also
recommended how to address the other top four contributing factors to prevent
small businesses from failing in Liberia. However, the information in this
study is very essential for the development of the small business sector in
Liberia, and other parts of Africa. It is also beneficial to the literature
review of small businesses and their failure.