"Nothing Succeeds Like Success" Similar Is The Case With Failure
It is a pity situation that entrepreneurs fail at attempt of establishing their business in the society, while evaluating the reasons one can come across many reasons that may vary from business to business and individual to individual. Hence the few of the possible reasons that are common for all are as follows:
The bankers’ and investors’ opinions about the entrepreneur will be dependent on how they were treated when the business failed. If the exit strategy was bankruptcy there is a great chance that the entrepreneur will have to find new creditors for a new business venture.
The clients’ perspective on the entrepreneur goes through the product it provides. The greater the need and benefits the product fills, the more supportive the clients who used it are towards the entrepreneur wanting to start fresh
When small businesses fail, the reason is generally one, or a combination, of the following:[/b]
[/b]
Inadequate financing often due to overly optimistic sales projections;
Management shortcomings,
Such as inadequate financial controls, lax customer credit, inexperience, and neglect, and;
Misreading the market,
Indicated by failure to reach the "critical mass" required in sales volume and profitability,
Usually due to competitive disadvantages or market weakness
Undercapitalizing the Business
Its often a common scenario that entrepreneurs underestimate their business in terms of time and capital, that is essential to reach that cash flows breakeven point, thus the results are premature breakdown.
Poor Pricing Strategy
The most common method for setting prices is to start at the unit cost and then mark up the price to achieve a profit, so-called "cost-plus" pricing. Cost-based pricing can lead to prices that are greater than what the market will bear. It is since unit cost is related to sales volume, high prices lead to fewer sales, which in turn increases unit cost, leading to a further round of price increases.
Growing too fast
Growth is considered the hallmark of business success. It is said that the top line growth requires additional investments in fixed assets and working capital. Many times, owners are not even aware of the impending collapse, because they focus on profitability rather than cash flow.
Business owners often fail to establish clear goals and create plans to achieve those goals, especially before starting out, when they fail to develop a complete business plan before launching their company. You can't achieve your goal if you do not have one. Having a goal gives you purpose and direction. They are like the dashboard on your car and chart your course and tell you when you have arrived at your destination. Most young entrepreneurs focus too much on the details versus just mapping out the end of the journey.
Another reason an entrepreneur can fail is by listening to others. By listening to cynics and poor people with limited reality you risk believing that starting a business is risky while it does not have to be. The conflict of interest is caused due to differences in reality while finding people with similar interests and reality will improve the business.
An entrepreneur has much to learn in order to be successful, including the day-to-day mechanics of running a business, producing products, delivering services, making money and dealing with people. The biggest challenge of all is developing an understanding of themselves. They come to grips with what they want and what motivates them; this sustains their willingness to prevail over the long term against adversity. Successful entrepreneurs have learned to transform their thinking, allowing them to prevail where others fail along the way.
According to Flash Euro barometer, more than 50 per cent of Europeans would not invest in a business that had previously failed. To combat negative social attitudes towards business failure, information and education programmes are needed.
As you know an entrepreneur’s risk appetite can get him/her to take on initiatives more than his capabilities or resources. He or she can take decisions that turn into losses. There is an old saying “Nothing succeeds like success.
It is a struggle to go to work every day and not enjoy our work, but we can tolerate it because we see the paychecks on Friday, we have the perks, we have weekends, and so on. However, that struggle is taken to a whole new level when the person who dislikes his job, also is his own employer. The self-employed don’t necessarily receive a weekly pay check, a weekend off, or any perks whatsoever. When the pressures of ownership are heaped onto a poor job fit, there exists little stamina to stay the course. Working in a less than joyous job is one thing, but owning a less than joyous job is a whole different world.
It is a pity situation that entrepreneurs fail at attempt of establishing their business in the society, while evaluating the reasons one can come across many reasons that may vary from business to business and individual to individual. Hence the few of the possible reasons that are common for all are as follows:
The bankers’ and investors’ opinions about the entrepreneur will be dependent on how they were treated when the business failed. If the exit strategy was bankruptcy there is a great chance that the entrepreneur will have to find new creditors for a new business venture.
The clients’ perspective on the entrepreneur goes through the product it provides. The greater the need and benefits the product fills, the more supportive the clients who used it are towards the entrepreneur wanting to start fresh
When small businesses fail, the reason is generally one, or a combination, of the following:[/b]
[/b]
Inadequate financing often due to overly optimistic sales projections;
Management shortcomings,
Such as inadequate financial controls, lax customer credit, inexperience, and neglect, and;
Misreading the market,
Indicated by failure to reach the "critical mass" required in sales volume and profitability,
Usually due to competitive disadvantages or market weakness
Undercapitalizing the Business
Its often a common scenario that entrepreneurs underestimate their business in terms of time and capital, that is essential to reach that cash flows breakeven point, thus the results are premature breakdown.
Poor Pricing Strategy
The most common method for setting prices is to start at the unit cost and then mark up the price to achieve a profit, so-called "cost-plus" pricing. Cost-based pricing can lead to prices that are greater than what the market will bear. It is since unit cost is related to sales volume, high prices lead to fewer sales, which in turn increases unit cost, leading to a further round of price increases.
Growing too fast
Growth is considered the hallmark of business success. It is said that the top line growth requires additional investments in fixed assets and working capital. Many times, owners are not even aware of the impending collapse, because they focus on profitability rather than cash flow.
Business owners often fail to establish clear goals and create plans to achieve those goals, especially before starting out, when they fail to develop a complete business plan before launching their company. You can't achieve your goal if you do not have one. Having a goal gives you purpose and direction. They are like the dashboard on your car and chart your course and tell you when you have arrived at your destination. Most young entrepreneurs focus too much on the details versus just mapping out the end of the journey.
Another reason an entrepreneur can fail is by listening to others. By listening to cynics and poor people with limited reality you risk believing that starting a business is risky while it does not have to be. The conflict of interest is caused due to differences in reality while finding people with similar interests and reality will improve the business.
An entrepreneur has much to learn in order to be successful, including the day-to-day mechanics of running a business, producing products, delivering services, making money and dealing with people. The biggest challenge of all is developing an understanding of themselves. They come to grips with what they want and what motivates them; this sustains their willingness to prevail over the long term against adversity. Successful entrepreneurs have learned to transform their thinking, allowing them to prevail where others fail along the way.
According to Flash Euro barometer, more than 50 per cent of Europeans would not invest in a business that had previously failed. To combat negative social attitudes towards business failure, information and education programmes are needed.
As you know an entrepreneur’s risk appetite can get him/her to take on initiatives more than his capabilities or resources. He or she can take decisions that turn into losses. There is an old saying “Nothing succeeds like success.
It is a struggle to go to work every day and not enjoy our work, but we can tolerate it because we see the paychecks on Friday, we have the perks, we have weekends, and so on. However, that struggle is taken to a whole new level when the person who dislikes his job, also is his own employer. The self-employed don’t necessarily receive a weekly pay check, a weekend off, or any perks whatsoever. When the pressures of ownership are heaped onto a poor job fit, there exists little stamina to stay the course. Working in a less than joyous job is one thing, but owning a less than joyous job is a whole different world.