How to handle business failure

Building a business consists of three major aspects; coming up with a good business idea, building a framework for that business idea, making that business idea work and sustaining that business idea. Anyone can come up with a viable business idea or even have substantial capital to make the business idea come through, but the most important aspect of building a business is during the structural framework. It is during the planning process that most business-minded people go wrong. They fail to identify the possible setbacks or factors that can variably or invariably hurt the business. And as such, they tend to overlook the proactive measures against future contingencies which could ultimately lead to business failure.




After a business failure what most people do is to either give up on that business or move into other businesses whilst not taking note of what went wrong in their former business. Lack of planning and assessment is one of the major factors that bring about business failure in most cases.
There are some issues to consider

when a business fails. The first thing to do is to try to isolate the cause of the distress whose symptom is mostly shortage of income. As a business owner, when you notice such business failure, you should firstly check if these gaps have been met or not:

1. Is the systemic shortage due to the failure of a business model?

2. Was there an external factor that depleted the money and placed the company on the back foot?

3. How does the company fair in terms of cost-to-income ratios compared to other industry or industry firms?

4. Are the employees earning more than their output?

5. Are the employees earning less than what can make them productive and proactive?

6. Is there a good fund manager in place?

7. Is the company account linked to the personal account?

The main reason most businesses fail is their inability to anticipate the changing landscape ahead. When dealing with a company that fails, it is important to step back and think about whether or not they are conservative or following the contemporary market trends.




WHAT TO DO WHEN A BUSINESS FAILS

It is always good to sniff and reverse brands or similar businesses that use the same market model because they could take us a step ahead. In other words, by adopting other methods used by our competitors. Emphasizing whether they use a form of marketing or outreach that is really more effective than ours and if it is necessary to implement these tactics in our business.

Step back and look at the company from an outsider point of view (third party). Get a business coach who has proven experience by having built their own businesses and not a coach who only has theories.

Revisit your business plan (the do's and don'ts) and then examine your management style and the decisions you made that make your business fail.

Customer's psychology shows that people tend to demonstrate loyalty to the seller who has a much more better offer than other competitors. Analyse your marketing concepts, are they appealing enough to woo customers to your company?




How to handle business failure How to handle business failure Reviewed by sidex Jay on December 10, 2017 Rating: 5

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