5 Reasons Businesses Fail

From a liquidator's perspective.

I recently wrote about the warning signs of insolvency and thought it was worth sharing what I see most often when things go wrong.

With insolvency numbers now above pre-COVID levels, it's time to look again at the five common reasons (or at least the common themes) why a business fails.

The first observation? These things don't creep up slowly.

Too often, I see good people running good businesses, but they let small things slide until they snowball into cashflow pressure, ATO arrears, and eventually, a call to me.

None of what I mention in this article is rocket science, and it's all on our radars to review as business owners, but after 26 years in the game, these issues still show up in almost every insolvency I handle.