Which of the following issues could contribute to the failure of a business?
A. The owner invested time and effort in researching target markets.
B. The owner was adept at providing directions to employees.
C. The owner provided a business plan to potential investors.
D. The business underestimated the cost related to high employee turnover.
Answer (2)
The issue that could contribute to the failure of a business is D, which states the business underestimated the cost related to high employee turnover. This underestimation can lead to significant financial strain and operational challenges. The other options highlight positive actions that do not contribute to failure.
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In this question, we are trying to determine which factor could contribute to the failure of a business.
Let's evaluate each option:
(A) The owner invested time and effort in researching target markets.
Researching target markets is generally a positive action. It helps a business understand its customers and tailor its products or services to meet their needs, potentially leading to success rather than failure. Therefore, this is unlikely to contribute to business failure.
(B) The owner was adept at providing directions to employees.
Being adept at giving directions to employees is also a positive trait for a business owner. It ensures clarity and efficiency in operations, which can reduce misunderstandings and enhance productivity. Thus, this is not likely to lead to failure.
(C) The owner provided a business plan to potential investors.
Providing a business plan is typically advantageous. It shows that the business has clear goals and strategies, which can attract investment and facilitate better decision-making. Hence, this would not contribute to failure.
(D) The business underestimated the cost related to high employee turnover.
Underestimating costs, particularly those related to high employee turnover, can be detrimental to a business. High turnover might lead to increased recruitment and training costs and a potential loss of productivity. Not budgeting for these expenses could lead to financial problems and negatively impact the business's success.
Based on the analysis, option D : "The business underestimated the cost related to high employee turnover" is the factor most likely to contribute to the failure of a business. Managing costs effectively is crucial, and failure to do so can be a significant risk factor.
