How You May Avoid Looming Business Failure
Table of Contents
This is another way of saying ‘ how to overcome business failure’ or ‘ how to make your business succeed’. This is an x-ray of causes of business failure. It’s a composite dose on how to prevent loss in business. Therefore, this post discusses the reasons for business failure and proffer solutions to business failure. It’s essential you know How You May Avoid Looming Business Failure.
For a start, what is business failure?
Business Failure is a situation in which a company/business/organisation ceases operations because it’s unable to generate sufficient revenue to cover its expenses. In addition, aBUSINESSBUSINESS profitable business can also fail if it does not manage its cash flow properly to meet its working capital requirements. So, business failure means, you re out of business.
Since business failure is relatively common in the first two years of business operations, because the owner is unable to stand competition for a number of reasons, we have listed and explained in this post those pitfalls you must avoid as both an existing and start-up businesses.
How You May Avoid Looming Business Failure
Reviving Business Questions:
Here are questions that could help you revive your business. We pose these questions from different business angles to help you see where failure can come from. Their solutions are very comprehensive. If you must succeed in your business, you must go through this write-up. We offer an internal control package to help you revive your business, if you so desire.
Remember: In life, nothing happens until you make it happen for yourself.
- How do you stop a business from failing?
- What can entrepreneurs do to avoid failure?
- What is the most common cause of business failure?
- Why do some business plans fail?
- What makes small business fail?
- Is your business internal control mechanism working efficiently?
- How do you revive your dying business?
- And, how do you know when your business is failing?
- How is your business marketing strategy?
- What re the reasons why business fail?
- How can your business overcome losses?
- Again, how do you know when your business is successful?
- How do I save a business closing?
These questions are answered below.
Remember: Whatever you can Conceptualize and Visualize, you will Actualize.
How to Avoid Business Failure:
The following re reasons why some business fail. They re therefore, facts you must work on if you want to continue in business.
We want to classify reasons for business failure into External and Internal causes. This is to enable you focus attention to them appropriately.
How You May Avoid Looming Business Failure
External Causes:
These are factors beyond your control. But, you need to work on them and take up remedial measures promptly.
- War – War or political instability could lead to business failure. At such times anything could happen. Hoodlums could take advantage of the political instability to loot properties and business wares.
- Recessions/Economic Down turn. – Where this happens as we had few years back globally, many business failed. In Nigeria for example, from 2015 till 2019, what we call economic hardship, due to bad governance, lead to many business failures. Yet, many businesses thrived within this time. Find out the type of business that succeeded and what they did.
- High Fiscal and monetary policies: These could manifest in form of high taxation, high interest rates and high foreign exchange rates. Pay attention to these early and work out a way to handle them.
- Excessive regulations – Where relevant regulatory bodies impose stringent conditions on businesses, many businesses could close shop if they are unable to meet up with such conditions. Therefore, you need to identify and watch the particular regulatory body over your business. In fact, failure to keep to such regulations, even when they are simple, could cause you to close shop.
Get your contract bidding documents here.
How You May Avoid Looming Business Failure
Internal Causes:
These are factors that are generated internally within the business operations. It’s entirely internal control mechanism of a business. A first point here is that you must not run your business haphazardly. Put up a control system in place. Therefore, the following factors may be hunting you in your business. They may mean that you are not the one in control of your business. Our advice is that you must do something about them for the good of your business.
Legalise your business: This is simple. Check out what regulatory bodies that control you operations and apply accordingly. Click here to get your business/company registered with CAC. And then click again here to obtain your import licences.
Have a business plan: Put a business plan in place. And let these be reviewed from time to time. That will make them relevant to the operations of your business. Always make accurate projections. Over ambitious projections may not be achievable.
Poor Management Team: This leads to poor management decisions. Focus your efforts .on what you want. As a sole proprietor know who to surround yourself with. Create a company culture and value system. Define your vision and mission. Create systems. – admin system, accounting and other systems should be working well. Let there be control
Furthermore,
- Insufficient marketing – Work out your market segmentation. Define your marketing strategies. This is what will generate the turnover you desire to keep the business going.
- Inability to compete with other similar businesses – Do something differently. Ensure you have variety of stock in place and at right quantities.
- Lack of interest from the public in the business’s offerings – If you are in a business that is contrary to public interest, then you re in soup. The business will not go far. It’s like a car driver driving contrary to the traffic.
- Financial management – Financial information is a major management information. Keep your financial records complete and accurate. Take your personal or family transactions and finances away from your business. .Don’t struggles around cash flows. Insolvency and over trading are twin brothers. The two are indication of insufficient working capital. Avoid high debt loans. High gearing, credit cards and other forms of debt can be a double-edged sword for a small business.
How You May Avoid Looming Business Failure
A Homework for You:
If you have any of these factors as a challenge in your business. Complete Full Marks Consultants Limited could help you out. We will do your accounting and auditing (internal control system), tax management, business plan, CAC documentations. Obtain your mining licences and process your contract bidding compliance certificates, like, PENCOM< ITF and ITF compliance certificates.
As Chartered Accountants we can do more than these for you. Contact us through +234 8034347851 and [email protected]
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Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.
