OTE2601
Assignment 2 2025
Unique #:
Due Date: 15 June 2025
Detailed solutions, explanations, workings
and references.
+27 81 278 3372
, QUESTION 1
In South Africa and around the world, many small businesses face challenges that
lead to failure. Learning from successful entrepreneurs like Patrice Motsepe—who
overcame financial and strategic obstacles—can help young entrepreneurs avoid
common mistakes. Below are ten reasons why many businesses fail:
1. Incompetent Management
Many business owners lack essential management skills such as planning,
marketing, and staff management. This often results in poor decision-making,
inefficient operations, and weak leadership, which can cause the business to fail.
2. Lack of Experience
Some entrepreneurs start businesses without understanding the industry or how to
manage a business. Transitioning from being an employee to a manager requires
different skills, and without this experience, they struggle to lead effectively.
3. Poor Financial Planning
New businesses often lack enough funds to survive the first few months. During this
time, sales may be low, but expenses continue. If entrepreneurs do not plan how to
cover their costs during this period, they may run out of money.
4. Poor Financial Control
Without proper financial controls, such as cash flow management and
recordkeeping, entrepreneurs may lose track of spending and income. Giving credit
to customers without clear terms also increases the risk of financial loss.
5. Inflexibility
Varsity Cube 2025 +27 81 278 3372
Assignment 2 2025
Unique #:
Due Date: 15 June 2025
Detailed solutions, explanations, workings
and references.
+27 81 278 3372
, QUESTION 1
In South Africa and around the world, many small businesses face challenges that
lead to failure. Learning from successful entrepreneurs like Patrice Motsepe—who
overcame financial and strategic obstacles—can help young entrepreneurs avoid
common mistakes. Below are ten reasons why many businesses fail:
1. Incompetent Management
Many business owners lack essential management skills such as planning,
marketing, and staff management. This often results in poor decision-making,
inefficient operations, and weak leadership, which can cause the business to fail.
2. Lack of Experience
Some entrepreneurs start businesses without understanding the industry or how to
manage a business. Transitioning from being an employee to a manager requires
different skills, and without this experience, they struggle to lead effectively.
3. Poor Financial Planning
New businesses often lack enough funds to survive the first few months. During this
time, sales may be low, but expenses continue. If entrepreneurs do not plan how to
cover their costs during this period, they may run out of money.
4. Poor Financial Control
Without proper financial controls, such as cash flow management and
recordkeeping, entrepreneurs may lose track of spending and income. Giving credit
to customers without clear terms also increases the risk of financial loss.
5. Inflexibility
Varsity Cube 2025 +27 81 278 3372
