2.12. Failure causes of
small and medium enterprises in Rwanda
Richard Hodgetts (1982: 24-26) has asserted that the causes of
failure of small and medium enterprises are as follows:
a. Some managers are incompetent: the major reason as to why
many small and medium enterprises fail is incompetence of managers. The owners
simply do not know to run the business.
b. The second most common reason why small and medium
enterprises fail is unbalanced experience. By this, we mean that the owners do
not have well rounded experience in the major activities of the business such
as finance, selling and production. Due to lack of experience in one or more of
these critical areas the enterprise gradually fail.
c. Another common cause of business failure is lack of
managerial experience. The owners simply do not know how to manage people.
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