Bouncing Back From A Business Loss

 

 

Individuals who choose to engage in business and leave the corporate world have one goal in mind –to achieve more things to secure the future of their families. How difficult times have become. I have seen so many people who have chosen this path and have become successful. However, there inevitably are those who fail in achieving their goals only after a few months of operation.

Why does business fail?

People in the business may start pointing fingers at who to blame when the company turns south. Realistically, failure in business is not caused by only one person or just an overlooked incident. There are so many reasons why a business fails. And when entrepreneurs fail to identify the cause and persist in pursuing the industry, it is surely bound to fail. The most common reasons why business failures are:

      1.  The products offered may not be as unique. There are so many similar products that you can see in the market. However, to stand out, entrepreneurs must focus on how it can be something the public will want over its competitors.

      2.  Poor customer service. This is one particular factor that is very important in any kind of business. As an entrepreneur, you must always ensure that the people buying your products are not just fully satisfied with the type of product they purchase but also given proper courtesy when they seek assistance if they encounter any problems regarding your products. Employees/salespersons should have the appropriate training on how to deal with different kinds of customers.

      3.  Just like a ship, it needs a captain to lead the boat in the right direction. That is why there are supervisors and managers assigned to each department. So that the quality of products and services is ensured all the time. The leader of the team has the responsibility to make the right decisions. Additionally, the entrepreneurs themselves should always equip themselves with the right skills to be influential leaders to their employees.

 

      4.  Insufficient capital is one primary concern in building a business. You may have a great idea in mind on how you want to run your business. But if you lack the necessary capital, it may not be possible to survive the company too long. Remember that your return on investment in any type of business will take months or even years. Therefore, for the initial phase of the business, you need to make sure that you have the means to cover your overhead expenses. Such as the salary of your employees, store/office lease, taxes, suppliers, etc.

     5.  Incompatible business partners. If you think you would need help from others to start your business, considering a business partner could be an option. However, choosing the right business partner is very crucial. It is not enough that the person you have in mind is a friend or someone you may have known through a friend. You need to look for a partner that sees the same vision as yours and has a comprehensive perspective regarding handling a business. More than the financial aid that the partner can provide, you and your prospective business partner should have a good relationship. This can lead to the business’s success and not pull you down or the company.

     6.  Inability to have a clear definition of your customers. Thinking of what kind of product or service in mind to offer, you should have a clear vision of the right target market. The same goes for choosing the right location to provide your products and services. Suppose you are thinking of offering high-end products. In that case, the business is unlikely to prosper if your shop is located where only ordinary people shop.

     7.  Unscrupulous spending. Always remember that your business is not your bank account. Although you primarily built the business in the hopes of earning, you must learn to just give yourself a certain percentage. So that you do not overspend by taking out most of the money that your business needs. This is a common mistake among some entrepreneurs wherein they see their business growing and would literally be hopping on to the next plane to Europe. If entrepreneurs always have this kind of mindset, the business would indeed close up soon.

How to get back on your feet after losing a business?

A natural entrepreneur does not just stop and give up as soon as he comes across a bump. Entrepreneurs are risk-takers. However, they try to make wiser decisions by looking back on what made their business fail. Entrepreneurs should be able to do these:

      1.   Have some time to think if you are ready to start all over again. Even if you already have the capital needed to create a new business, you must see yourself having the enthusiasm to go on. It is hard if you just push yourself to start any business, even if you know that your heart isn’t in it.

      2.  Ask yourself why your business failed. Identify what could have been the causes so that you can find the solution to avoid it from happening again. Allow yourself to polish your skills and improve yourself to minimize potential faults. It may not always be the entrepreneur’s fault. However, the entrepreneur’s responsibility is to look through everything and carefully choose the right people to work for him. You may not know everything. Therefore, looking for an adviser or business mentor may just be of great help.

       3.  Create a better business plan. Never settle for just a “PLAN A.” No matter how much you think you have made it so perfect, it is always wise to develop a backup plan, just in case.

Keep in mind that things may not always happen the way we planned them. But always make sure that your eyes are widely opened so that you can save your business before it completely crumbles. Wasting all those time and money can indeed dampen anyone’s enthusiasm. However, think of it this way — these bumps that you come across will be your pillar of strength so that you may slowly achieve your most fervent desires.

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You may contact Armando “Butz” Bartolome for questions and more information.

By email: [email protected]

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