Question

Franky Ferguson has just reached a turning point in his business. He can no longer retain quality employees because he cannot meet his payroll, he does not have an adequate cash flow to pay his current bills, and he is three months behind in his loan payment to the bank. He must close the doors of this business.

What is the primary reason Franky has failed?
a. inadequate management
b. lack of a quality product
c. no target market
d. inadequate advertising

Answer 1

Franky Ferguson's business failure is primarily due to inadequate management, as indicated by his failure to meet payroll, maintain cash flow, and keep up with loan payments.

Step-by-step explanation:

The primary reason Franky has failed is inadequate management. Businesses can fail for many reasons, including poor management, non-productive workers, or strong competition. In Franky's case, the inability to meet payroll, lack of adequate cash flow, and falling behind in loan payments all point to management issues that prevented the successful operation of the business. Efficient management is critical in maintaining a healthy cash flow, ensuring that employees are paid, and managing debts responsibly.