One of the most horrifying sights for most business owners is to see another company going out of business altogether, unless it is the competition perhaps, and as most owners know only too well, this is something which occurs with far too much regularity. Being a business owner these days is about far more than just finding success and in fact, whilst success should be uppermost in the mind of an owner, the awareness of the frailty of business should also occupy a lot of the mind.
In order to avoid catastrophic failure as a business, it is vital that owners understand the mistakes of those made before them, to ensure that they can avoid them in the future, let’s take a look at some of the biggest errors which cause businesses to close.
The key to success and failure as a business is finance, not having enough, not spending wisely and ultimately, complete mismanagement of the money side of things. As a business owner you may very well have to focus on finances yourself in the early days but this should always be an area of your business which is looked after by a professional. Owners should always stay close to the finances of a business but do not be confused, your role as owner is to run the company, not get buried in the cash flow.
Whilst many new businesses understand very well how important their reputation is and how difficult it can be to build, unfortunately however there are many established companies who think that they are teflon and that their reputation cannot be damaged. The problem is that today’s online world can see the reputation of a business destroyed in a matter of days if they aren’t careful and managing your reputation online is more important than ever before. You may think that your online reputation is good but as many reputation management consultants reviews will show you, most people are surprised by what is actually written online about their business.
Growth is something which every business should aim for, year on year there should be signs of growth and a 5, 10 and 20 year plan should be in place with growth in mind. One thing that often contributes heavily to a company being forced to close is either failing to grow when they should or trying to grow too soon. It is vital that a company grows in line with its own success and has triggers in place by way of sales or revenue, which they should act on in terms of expanding the business. If you are unsure of when or how you should grow your company, take note from those who have gone before and assess which failed, and which succeeded.
Running a business is tough, but understanding where the pitfalls are, can greatly help you to avoid them.