THE CAUSES OF BUSINESS FAILURE: A LITERATURE STUDY

There are both success and failure stories in business. Therefore, to avoid repeating failure, the failed entrepreneur needs to
investigate what caused the failure. Several studies abroad have discussed the causes of business failure. However, in
Indonesia, most research focuses on business success factors. Research on business failure has not received the attention of
researchers. Therefore, this study aims to analyze the factors causing business failure in various literature. By knowing the
factors that cause failure, it is hoped that entrepreneurs can anticipate business failures. To achieve this goal, the researcher
used a literature study research method. Research data are the results of as many as ten studies by previous researchers. The
literature study results obtained two variables: the dependent and independent variables. The dependent variable of business
failure has variations: the entrepreneur closes his business, goes bankrupt, is acquired by another company, merges with
another company, dissolves the company, and dismisses employees. The independent variables that are widely mentioned as
factors causing business failure are owner characteristics, business environment, entrepreneurship education, capital, resources,
business experience, social relations, and entrepreneur psychology and emotions.