If businessmen are to be asked “What ten things would you do or not do to prevent a business venture from failing”? Here are some ideas that maybe suggested and which could help you avoid failure:
1. Do proper FEASIBILITY STUDY before you venture into any business. Often, not enough RESEARCH goes into a project before implementation. Your project must be bankable or be attractive to investors. This justifies the commitment of own or external funds.
2. Under CAPITALIZATION, in other words not committing enough own financial resources to the business. This often results in the business seeking assistance from other sources, usually at astronomical interest rates. This must be avoided.
3. Improperly planned CASH FLOW analysis will eventually result in possible business failure. Especially if this is not calculated and produced accurately in the first instance. It is better to deal with negative cash flow on paper during the feasibility stage than during implementation.
4. Right from the word go, start keeping RECORDS of the business transactions. These must be accurate, reliable and timely as this is vital for the survival of and profitable operation of your business. Many, who fail, want to prepare their accounting records and reports long after the event; usually at the end of the financial year. This is historical and does not help to control expenditure, as well as to see whether or not the business is growing.
5. The business needs to be treated as a separate entity from its owners. It should be conducted apart from your personal affairs. This is because a business is a legal person in its own right and must be treated as such.
6. There is need for DISCIPLINE in all your business dealings and practices. Your discipline should zero in among other things, on: adherence to set down business plans and objectives, over expenditure, poor business execution and internal controls.
7. There must be continuous total commitment on your and management’s part, to ensure success and growth. This is to avoid complacency in the mistaken belief that, things will run on “Auto Pilot” or by remote control, which usually occurs once success begins to flow after a few months of operation.
8. You, as the owner or manager must have some latent leadership qualities, ambition and must be prepared to take risks. Risks emanate from different sources, including lack of business acumen, declining market opportunities as well as a hostile environment.
9. Remember that time lost is never regained. Therefore management of your TIME is as good as good MANGEMENT of your business. Have a priorities list of your daily activities.
10. In business, you must beware of the seven deadly sins, which MAHATMA GANHI once described as: “Wealth without work, pleasure before conscience, knowledge without character, commerce without morality, science without humanity, Worship without sacrifice and politics without principle”.
FOOD FOR THOUGHT.
In business, avoid acting like the “Red Cross” personnel, who go to the battlefield long after the battle, only to count the dead and to treat and collect the wounded. This does not stop the war. Be completely involved in “The thick of things”!
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