HOW TO AVOID BUSINESS FAILURE

By

Starting a business involves a lot of time, money and effort and failing—or even going bankrupt—is the last thing that any business owner would want to happen to their business.

Consider the following points when it comes to preventing business failure:

  • Supervise cash flow
  • Avoid going into debt
  • Create a solid business plan
  • Maintain good customer service
  • Learn from business competitors

Supervise cash flow

One of the most primary issues that business owners face when it comes to managing their business is the supervision of the business’ cash flow. If left unsupervised, expenses might shoot up and profits might lessen thus increasing the possibility for the business to go bankrupt.

In order to mitigate business failure, business owners should strike a balance between shelling out cash for the business expenses and gaining business profit via sales. Business owners should also take time to focus on tasks such as accounting and bookkeeping to make sure that finances are in order, which is especially crucial for fledgling companies.

Avoid going into debt

Probably the easiest way for business owners to prevent their business from failing, it is understandable—especially for startup businesses—to go into some form of loan.  Debt is a way for business owners to augment their funds and support business expenses, either in the form of credit cards or business loans.

While this is a good way for business owners to secure expenses, they should also be careful. When it comes to debt repayment, the business might be spending all its revenue on repaying debts and loans instead of spending on the needs of the business.

Instead of spending on income-generating efforts, such as expansion or adding more staff, if debt repayment is left unchecked for long periods of time it could cause bankruptcy.

If business owners can do away with their business without going into debt,  it makes it easier for start-up businesses. It might be hard to start with only a meagre amount of capital, but keep in mind that this is way better than having to put up with debt repayments in the future, especially if the business does not grow as initially planned.

Create a solid business plan

Planning ahead and covering all possible bases is one surefire way of making sure that a business avoids total business failure. Failing to create a business plan is a mistake that a lot of business owners commit.

An ideal business plan, aside from containing sales and marketing strategies, should also have contingency plans that can be utilised in case of an emergency. The business plan should also contain a clear strategy on how the business will be able to bring in profit while still having enough funds for the business expenses. Business plans should also be sustainable.

Maintain good customer service

Another way for business owners to prevent their business from going bankrupt is to make sure that revenue keeps coming in by maintaining good customer service—thereby assuring that customers will continue patronising their business. This can be done by maintaining a personal relationship with customers, listening to and addressing their concerns immediately and tailoring the business in such a way that addresses customers’ needs.

If a business already has a dedicated customer base, it is best to nurture this particular customer base and make sure that they remain loyal to the business. This is a cheaper option as compared to constantly looking for means to acquire new customers while disregarding an already loyal audience.

Learn from competitors

Competition is always tough in any kind of business industry. Business owners should take healthy competition as an opportunity to learn and possibly replicate measures to mitigate business failure.

There is a reason why these businesses succeed in their fields: business owners can be sure that their competitor’s methods are tried and tested and could have a higher chance of succeeding if applied to their business.

Learn more about small business success here.

Business failure is the one thing that a lot of business try to avoid, but prevention and mitigation is easy if business owners have the foresight to prepare and develop a good strategy before setting up their business.

Are you looking for online jobs in Kenya? Check it out here

How to make money online? Find out more here

Written by: Boaz Bett

Comments

Post a Comment

Popular posts from this blog

Make Money Online Today (Step By Step Guide)

By
Image
Gone are the days when you had to open a storefront to start earning. The internet has changed the game. Today, you can do business in a remote location: no shop, no stocks. Interesting? Well, you don’t have to own the products. All you need is to have that client and come up with how the commodities reach them. Additionally, the internet has opened up a lot of income-earning opportunities. From your couch, it is possible to see your money grow. Such is the case when you join First and Fast Communication System Company (FNFCOM). How does it work? Well, fnfcom is an online airtime distribution system enabling you to have sufficient top-up. Besides, the company seeks to help you out of those mobile debts, the likes of Fuliza, Mshwari, etc. It is time to get out of the cycle of debts. So, how do you go about it? Sign Up at fnfcom The first step is to create an account at fnfcom.   Go to your browser and load the website www.fnfcom.com . It takes you directly to the   ...
Read more

4 SECRET TECHNIQUES TO MAKE YOUR BUSINESS MORE AUTHENTIC

By
Image
 The Untold Secret to Mastering Authenticity. There's something to be said about authenticity in business . It allows us to show up as ourselves, not the cardboard cutouts we think others want to do business with. The result? A much more enriching and personable work experience and an irresistible magnetism that attracts new business. Authentic people and things are the real deal. And when it comes to business, this matters more than you may think. Take a look at the following techniques to build and maintain authenticity in business. #1. Use storytelling Authentic people and things have stories behind them. These stories back up claims and highlights how they got to where they are today. An authentic meal? Passed down from generation to generation. An authentic artifact? Found through an excavation in some part of the world. An authentic business? Started in the basement of a factory, built up through years of struggle, determination and grit. You need to be a storyteller. A...
Read more

TOP 5 REASONS WHY YOUR BRAND NEEDS LOYALTY PROGRAMS

By
Image
 The Hidden Secret To Brand Awareness. As brands constantly invent new ways to engage with their audience, customers are concurring with new technology faster and faster. They expect a higher form of a relationship with their brands. To succeed, you need to create an engaging customer experience. A well-designed and well-executed loyalty programme c an help you retain existing customers, attract new customers, reduce turnover and drive profits. Customer loyalty should be easy. And, by combining the ability for customers to pay for goods and reap the rewards via the same marketing channel, it really is easy. There are 5 primary reasons why your business should have a loyalty program:- #1. Grows your business through referrals The first stage of operating a successful business is chasing and maintaining customers. Without them giving you their money, your business ceases to exist. The second stage is one that, sadly, many businesses never get to getting current customers to bring in...
Read more

5 INCREDIBLY USEFUL TIPS FOR NAMING YOUR START UP.

By
Image
 Tips For Small Businesses. Entrepreneurs fret over packaging and host of other details as they started, and then leave one of the most important aspects as an afterthought. The sad truth is that the right name can sometimes make all the difference when it comes to propelling a business to success , rather than just slogging on. The wrong name can do worse than fail to connect with customers. It can also result in insurmountable business and legal hurdles. In contrast, a clear, powerful name can be extremely helpful in your marketing and branding efforts. Whether you are a new small business owner or you're trying to launch the next big tech startup, these tips can help you choose the perfect name for your company. #1. Keep it simple, short and scalable This is one of the best tips that you can follow to name your company. You should choose a name that is simple, short, scalable and memorable. Another common mistake that startup owners make is to choose names that are too restrict...
Read more