Why businesses fail and how to avoid it – Part 5
As we go into a new year, when so many new businesses start up, we are continuing, by popular demand, with our on-going series of why so many businesses fail and hopefully offering helpful advice on ways to avoid it!
This can also be helpful to businesses that just don’t seem to be growing and need to just get back on track. So this is part five of why do businesses fail and how can we avoid it?
We are too far into the series now to re-cap, but if you have missed the first four parts they can be found on the Ratio Accounting website. We have already touched on the obvious reasons for failure like poor leadership, poor general and financial management, having no business plan and being wrongly positioned, but what are a few of the less evident reasons businesses fail?
They don’t research their market
As we discussed in a previous blog, it’s simply not enough to just know your market. You need to practice continuous research to ensure that you always know, not only exactly what your customers want, but where trends are going and what your opposition are doing.
Know your options and the technologies available to you too. You are always only going to get as much out of your business as you put into it. You reap what you sow!
They don’t re-visit their business plan
If you wrote a good enough business plan in the first place you should be able to revert to it often when things are not going quite as planned. So many businesses neglect to get back on track through simple revision of their business’ original plans, goals and objectives.
Remember this if you are a start-up and still have a business plan to write. Ensure it’s not just about how you’ll start, but that it will be a guide for all sorts of future eventualities and possibilities.
They have no accountable leadership
Accountability is such a vital aspect of business. Don’t even go into business if you don’t have an ethos of accountability at the outset. Whenever you mess up you need to be ready to accept it, rectify it and ensure you don’t repeat it!
Sadly, many businesses neglect to ensure that they have accountable leadership and many appointed leaders tend to think that delegation is passing the buck. This is definitely not so. The buck stops with you and that’s how it should be.
They don’t have accountable Accountants!
Many businesses have also failed because the Accountants they employ have also not been accountable and when the business starts to struggle they simply jump ship and look for the next customer.
The failure of the business may well have been because the business had not been correctly advised or looked after with regards to financial matters. We at Ratio Accounting are fully accountable and pride ourselves on the fact that best practice and correct advice is administered to all our valued customers at all times.
Check out our website to view our comprehensive range of Accounting services – and contact us for an evaluation of your business’ financial structure and advice on how we can ensure you avoid being one of those businesses that fail!