Any experience can become helpful if you draw the right conclusions in time. A failed business is a collapse of hopes, disappointment, a financial failure that breeds despair and hopelessness. However, you can find a way out of any situation by opening the door to a new reality. How to continue life after the collapse of the business, how to survive business without loss?
What kind of business can be considered a failure? One with no financial gain? Or the one where the burden of heavy debt is getting heavier every month?
Business becomes unsuccessful when there is no basis for continuing it: the market is not fully understood, there is no concept of changes in demand — by product category, assortment and season, there is no control over the movement of funds. Should the ship’s crew be blamed for the ship’s sinking?
Pessimists joke that a business needs to be ruined at least four times before you learn how to run it; optimists say that two will be enough. In order for a business to bring serious income from the very first days, you need to possess a lot of technologies and skills, to know all the nuances of running your business, personnel management, and the intricacies of communication with the energy of money.
This is prevention, but what to do if the disaster has already occurred? Look for the reasons for failure, assess your potential, choose a new direction. This will help you to avoid similar mistakes in the future.
This is one of the most common reasons for business disruption, with every co-founder hoping to enter heaven on the back of their partner.
As partners, it is necessary to choose competent and experienced people who are capable of managing professionally. Although such people hardly need co-founders: if they are skillful in their business, they have enough funds to open a new direction. True, there may not be enough time to develop a parallel business.
The best way to avoid such a mistake is to open an independent business, without partners. In this case, there will be no one to blame for the failures, and any option for the development of the situation will have to be taken over. At the same time, you cannot get a half-hearted result: there is no one to share with — neither mistakes nor debts.
“The retinue makes the king,” says a French proverb. Without a team, it is impossible to develop a business, recruitment, and personnel management as a separate science that requires serious experience and knowledge of the psychology of employees.
Without professionals, you cannot sell a product or service, without lawyers you cannot cope with the law, and without accountants, you cannot achieve the balance. Either you will have to comprehend all these sections on your own, or you will have to recruit a strong team.
Most young entrepreneurs try to start their own businesses relying on a bank loan. Typically, ninety percent of new businesses will close within the next year without breaking even. The reason for these business failures lies in the lack of economic and accounting basic knowledge of company management.
Failure to calculate commercial risks, study the demand for new supply, and anticipate seasonal downturns leads to a monetary collapse a few months after opening a business.
When preparing a business plan, it is difficult to calculate in advance the necessary financial resources, which, as a rule, turn out to be many times higher than planned.
Aspiring entrepreneurs underestimate the role of a strategic building of all processes in the company. The first fiddle is usually played by the company’s product, and not the client, for the sake of which the company is created, in the enterprises that have failed.
If an enterprise is initially oriented inward, that is, towards the achievements of its own company, towards a product, and not towards clarification and satisfaction of needs, towards solving customer problems, sooner or later it will go to the bottom.
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Even if the ship called “Own Business” slowly and surely goes to the bottom, do not despair: you can always start over, with the most important asset — an invaluable experience.
“You cannot change the direction of the wind, but you can always raise the sails to reach your goal,” Oscar Wilde