Factors Affecting the Failures of Micro Businesses

In the Philippines, microbusinesses play an important role in reducing poverty, generating employment, and fostering economic growth. Despite their importance, many microbusinesses fail within their early years due to a combination of internal and external challenges. This study aimed to identify the factors affecting the failure of micro-businesses. The study used a qualitative case study design, collecting data through semi-structured interviews with four former micro-business owners identified through the Business Permits and Licensing Office (BPLO). Thematic analysis was employed to identify recurring patterns and insights. The findings revealed that internal factors, including limited capital, inadequate financial literacy, poor management skills, and psychological stress, contributed to business instability. External factors included poor business location, intense competition, customer credit dependency, and economic disruptions brought by the COVID-19 pandemic. Collectively, these factors led to declining revenues, unstable operations, and eventual business closure. Despite these difficulties, the participants shared valuable lessons, emphasizing the importance of perseverance, financial preparedness, and strategic planning for sustainability. The study concludes that fostering entrepreneurial resilience, enhancing financial literacy, and strengthening access to government support are vital in preventing microbusiness failures and promoting long-term local economic growth.