5 Reasons Why Your Business May Fail This Year
In the course of management consultancy, I have seen otherwise lucrative business go under for the following reasons. This year , you will need take into consideration these 5 points so that your business does not die. This is assuming you have the zeal and the self discipline.
Keeping Financial Records. Eight out of ten small companies in Nigeria do not keep records especially financial record. The record is very important in business. Having a look at the records a trained eye such as that of an accountant will tell you whether the business is healthy or going down. Besides, there is no way you can determine the profitability or otherwise of your business if you do not keep proper financial records. Other record besides Financials is customer’s profile. You must understand and know your customers. In this jet age you must find a way of sending messages to your customers of new arrival or new products, I do not need to add that you need to send birthday messages and festive greetings.
Financial Indiscipline. Many businessmen here will just dip their hands in the till and spend money. It is a simple rule of business that if you spend more than you earn, the business will go under. A healthy business practice is to lodge all monies in the bank as they are received. Similarly, all receipts must be receipted no matter how small. In any case in this period of cashless economy, you may devise a means for your customers to pay to the bank. A warning. You do not do this to make life difficult for your customers. If they find it easier to pay by cash please stick to that.
Pleasing Family and friends. Business grows when friend and family pay for services rendered. We all know this yet person closest to you will take advantage of you. You may not like it, it may be better to distance your business from your friends and family. As a rule do not employ family members unless your nuclear family and such person must have cut his teeth somewhere else. I have seen many men ruing the day they asked their wives to join them in their business. Do not find your meat where you get your bread. Remember, the Mafia Manager.
Employing or Keeping the Wong Staff. Henry Ford said, no matter how talented a staff may be, he should go if he cannot work as a team member. There are many talented people but who will always be disorganizing the system no matter how you try. They are a bad influence. As soon as you notice them and they are not prepared to change, remove them. Nobody is indispensable. The graveyard is full of indispensable people and the world has not ended. Similarly, you must scrutinize your intending employees. Some are just coming to get what they want, No loyalty. Some come with the intention to stay for a short period while you are hiring him with the intention of staying long. Your purpose is at the opposite end and it is not good for your company.
Lack of Planning. If you have failed to plan, you have planned to fail. Plans must be in written form and must be concrete. It is not for nothing that banks ask for your business plans before you are granted a loan. You should have a plan and gauge your performance against the plan. No business should do without short term cash forecast as the worst scenario. When you have real self discipline you will be able to have a plan and work it.
If you keep these rules this year, your business result will come out better at the end of the year.