What Causes the Failure of Enterprises in the City of Riobamba?

Abstract

Ecuador is the second most entrepreneurial country in the region with an Entrepreneurial Activity Rate (EAR) However, at the same time, almost 8 out of 10 ventures fail in their initial stage. Therefore, it is important to determine the cause of failure since it mainly arises from the uncertainty that we as human beings feel. Although a majority of entrepreneurs in Ecuador have good ideas, they also have many doubts, such as: What is the next step? Am I managing my business properly? Is my project really profitable? And not knowing the answers to them can be the decisive factor that marks the success or failure of their venture. Thus, the present research seeks to determine the main reasons for business failures in the city of Riobamba, for which a survey of 21 entrepreneurs from the city was conducted. It was determined that the main factor that entrepreneurs should take into account when starting their businesses is the development of a business plan that can help them in understanding their competition and the targeted market, and to estimate the real value of their investment.

Keywords

• business failure, crisis, instability, entrepreneurship, covid-19.