Why fails a trade company

Why fails a trade company numerous studies show different variables that affect the success or failure of companies, but most of these studies are focused on several variables:
– Psychological traits and personality of entrepreneurs;
– Managerial skills and training of entrepreneurs and
– The external environment.

Among the psychological attributes are highlighted those traits related to independence, innovation orientation, risk attitude, and competitive nature, which according to researchers, are related to success and which are essential factors in challenging business environments. Rauch & Free (1998) agree that psychological traits make a significant contribution to companies’ success and point out that other characteristics such as experience and training, special managerial skills, and the business environment are factors that can develop quickly and where state policymakers can help.

Organizational skills may include managing staff and maintaining accounts accurately, while environmental conditions relate to government support, access to capital, and the support of family and friends. In addition to these three factors, it is thought that social media or various social networks significantly impact success, especially in opening new businesses or start-ups, which is best verified in our time. In this way, talented individuals are more likely to grow and develop business ventures. But talent is not the only requirement. Risk avoidance is another skill that successful entrepreneurs must-have. By the 1930s, researcher Marshall had concluded that risk-averse young people were more willing to start a business than others.

The main risks that affect the failure of a business today have more to do with the global economic environment and international pressure, were to succeed in the short term, some companies may tend to commit corruption. Also, cost increases, mainly due to rising costs of wages, land, raw materials, exchange rates, and lack of cash flow to create a hostile environment for businesses. Companies have to face the challenges of managing legal, regulatory, and cultural differences in different markets, which bring difficulties for their well-being.

Meanwhile, no change in business success has been observed in terms of gender. Changes in performance by gender have been studied for many years but not as intensively as in the last two decades. Some researchers claim that there are no differences by gender.

Others believe that discrimination against women continues in the public and private sectors. Gender differences are attributed to factors such as human factors that bring education to owners and firms’ characteristics, such as the type of business. Other studies show some differences between the personalities of men and women, while other studies have revealed different managerial practices between them.