Top 10 Causes of Failure of a Business Part 1
Author: Catharina M Jasmine
1. Do not have a sales strategy. Many entrepreneurs start their businesses with great enthusiasm, great products or services and to a good financial backing, but they forget that to succeed you need to know to effectively sell and sell. Lack of a good sales strategy that ensures profits and expenses quickly are higher than their income. Tip: If you consider yourself a born salesman to do this job, make sure to hire the best salespeople.
2. Indiscriminate use of credit cards. Credit cards can be the difference between success or failure of a business. We know that a well-used card can be an excellent tool to leverage a business taking advantage of bank credit.
But a card out of control can be the perfect formula to inflate costs and become entangled in debt. Tip: Use your credit card only for incidentals, travel or expenses that you pay immediately. If your credit card is out of control, should be an urgent alarm for immediate action to avoid falling into debt.
3. Do not have a monthly spending budget. Messy handling or omission of a monthly expenditure budget can be a risk factor for your business. Shopping blind, make expenditures at the discretion or exceeded in the areas specified for each purpose will soon put your business on the line.
Equally dangerous is to have a budget but will not be disciplined in its management and the consistent application of costs. Tip: Make a monthly spending budget and stick to a disciplined him because this will be your guide to a wise investment.
4. Excessive cost of local offices. Many times in an effort to find the best spots or locations for your business, make the mistake of paying excessive prices for local or offices often do not return on sales which are really worth. Not consider variations of the market according to different seasons or consumer behavior can impact severely on your costs and affect your business.
Tip: when choosing a shop should do a study in consciousness that allows you to obtain an estimate of cost-benefit that you really dividends. Otherwise, it is worth considering a more convenient point.
5. Owners without pay. Another factor leading to many companies with great potential, bankruptcy is the lack of discipline of their owners assigned a salary. Often spend more than they entered, they overspend, they buy anything that comes to mind without consulting the budget, buy new cars, unnecessary trips or meals that do not represent any benefit in terms of business.
Tip: as the owner must assign you a salary that fits your business growth. Expect to win more than your company creates is an illusion that lasts a short time.