When you create a business it becomes your life, you pour your heart and all of your energy into it and often everything is riding on it so the thought of failure can be terrifying. So when things go wrong it’s easy to assume the worst, particularly when so many businesses do fail before they’ve even been trading for a year. Knowing what the potential pitfalls are and how to deal with things if they do start to go wrong can be extremely helpful.
In any business there are peaks and troughs when it comes to profit. In retail for example, the runup to Christmas will be a busy time with other times of the year being quieter. February for example people will be paying credit card bills from Christmas and then April is tax month. As a business owner it’s useful to remember that there will be busier times, however is profits have dropped and things just aren’t going as well as they once were it can be a cause for concern. Have you think about anything that’s recently changed, have you switched delivery companies, manufacturing companies or upped your prices? If you check out reviews for your business on third party review sites and go through any customer complaints these can give you a clue if you’re going wrong. Otherwise it might be a case of needing to improve your marketing and advertising. Show new materials, try new methods to get your name out there, you could run competitions and promotions to get people interested.
Fraud and Theft
Fraud and theft can come from criminals targeting your business, or even be a result of your own employees. To keep your business safe your company needs a multidimensional approach to security. Good windows and doors with CCTV and an alarm. A sturdy safe and regular money collections so you never have too much on the premises. You can protect against fraud with Netverify, this is an identity verification software allowing you to create a safe and secure customer experience. On your computers there should be complex passwords and firewalls, and if you backup your data to cloud based storage the information won’t be stolen- even if the physical computer is. To ensure you hire the most trustworthy staff, run background checks and follow up on references. Get to know them on a personal level and have an anonymous reporting system for if anyone sees anything that looks suspicious.
Accident or Injury
If someone is hurt as a result of your business or products it can spell disaster for your company. If it's deemed to be your fault due to health and safety not being followed correctly, neglect, badly made products or anything else you could end up with a serious lawsuit on your hands. Make sure you have all of the right insurances in place to protect your business, and seek legal advice on any matters that arise. Make sure you’re following health and safety laws to the letter, this includes things like making sure staff have the right training, that your workplace is kept safe and things like warning signs are displayed when floors are wet.
Sometimes personal debt can be the reason for business failure, as a company owner your business will be classed as an asset and something creditors will seize, even if you didn’t borrow money for that purpose. Carefully balance your books and maintain good personal finance. Use budgeting and tracking apps to help you keep on top of your spending to avoid this from happening. If things haven’t worked out with your business and despite your best attempts you’ve gone into the red and there’s no coming back, it’s time to declare bankrupt. This can be incredibly hard to accept, especially when you’ve given it all you have but sometimes things just don’t work out. One thing to remember here is that many successful business owners have had past failures. While it’s hard to deal with now, you will have learned a lot through your failures and later down the line when you’re ready to get involved in business again you can build upon this knowledge and experience. Sell as many of your assets as you can, even things like logos and trademarks, customer lists and other things you might not have thought of will be of interest to your competitors.
What’s the most stressful situation you have come up against so far as a business owner?
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