When the entrepreneur decides to open his company, he carries with him a series of dreams, plans and responsibilities. Regardless of the segment or size, all companies need assertive management to stay active.
Prospecting and retaining customers, good contacts with suppliers and a good team of employees are also other key factors for the business to thrive and succeed. But, just as there are essential points for the company's growth, there are also reasons that can lead a company to go bankrupt.
If you have opened a business recently or are going through a difficult period in your corporation, be sure to check the listing we made with the 4 main causes that usually lead the company into bankruptcy.
1. Not having knowledge about the market of performance
Let's start by talking about a reason that can negatively interfere with your business, which is the lack of knowledge about the market in which it operates. Before opening the business, the entrepreneur needs to do a segment and market analysis to identify whether your product or service will bring some differential to the target audience or whether it will be another competitor.
Saturated markets may not be a good investment, especially if your product or service does not bring something innovative. However, with this internal and external analysis, the entrepreneur has the chance to put into practice the creativity and try to bring something innovative to the items that he sells. Ignoring the importance of this prior knowledge can lead to bankruptcy
2. Unprepared and unmotivated team
As much as the entrepreneur is active, he will hardly be able to touch his business alone. In order to deal with the many tasks of different areas, it is essential to have a team of collaborators to help achieve the objectives. However, one reason that can lead a company to bankruptcy is the lack of preparation and motivation of these employees.
It is fundamental that for each area of the company, the entrepreneur hire professionals qualified for the job and offer them, whenever possible, training and courses to further improve their knowledge and keep them motivated. In strategic departments, such as accounting, it is worthwhile for the entrepreneur to consider hiring an outsourced company that has the expertise to manage the business accounts, helping it to stay active.
3. Not listening to customers' preferences can lead a company to bankruptcy
A common mistake in companies that did not work was the fact that they had not heard their customers. It is they, consumers, who make business spin and not know their needs, expectations and preferences is a risky business attitude.
With information about your customers' profile you can gain insight into product or service enhancements and promote personalized service according to consumer preferences. Without it, your company will become "one in the crowd", which could jeopardize sales and consequently the business.
4. Difficulties in dealing with errors
Finally, we will bring a motive that can lead a company to bankruptcy simply by the lack of preparation of the entrepreneur to deal with the errors and with the difficult situations. During the entrepreneurial journey, it is common to make many hits and mistakes, as in life. But the difference for successful companies is that they understand that failures are essential to everyone's growth. In addition, these companies learn from bad situations and are empowered to move forward.
If downgrading with moments of crisis is an attitude that can drive the company into bankruptcy, so the entrepreneur needs to have resilience.
Enjoy that you are broadening your knowledge about business management and check out also in our blog the article that shows the importance of monitoring the fiscal situation of your trade.
Posted on May 11, 2018 at 02:07 PM