Business Failure

Business failure occurs when a company is unable to continue its operations due to financial difficulties, often leading to insolvency, bankruptcy, or liquidation. This failure typically results from an inability to generate sufficient revenue to cover expenses, repay debts, or meet other financial obligations. Business failure can be caused by various factors, including poor management, lack of funding, inadequate market demand, intense competition, or external economic conditions.

Example

A retail chain might experience business failure if it cannot compete with online retailers, leading to declining sales, mounting debts, and eventual bankruptcy.