Business: The Reasons So Many Companies Fail

Business: The Reasons So Many Companies Fail

There are many companies out there who are destined for the gutter, but we don’t want your business to be one of them. Think of all of the huge companies that have fell in the last 10 years. On the outside, they seemed like a booming business who attracted customer after customer. But on the inside, there were so many things that were going wrong, and so many things that could have been done differently if that company wanted to survive. But, whilst we don’t want to dwell on the past, we want to focus on your company, we do want to draw on a few things that they might have been doing wrong, and whether your company is doing them too. Because business is all about success, but you can’t have success without doing a couple of things wrong from time to time. An error here and there is nothing to worry about, as long as you recover quickly. It’s the issues that we’re about to list below that we want you to avoid. So, have a read on, and find out why so many companies fail.

Debt Control

If you want a recent example of a company who went down due to their poor debt control, think about Carillion. A company that stood so proud in the construction world, and was signing million-pound contracts with big companies, and even the government of the United Kingdom. So, it wasn’t as if they were struggling to get the customers, it was more down to the fact that they were struggling to manage their debt. It really did pile up, to the point where they were in millions of pounds worth of debt, and still trying to borrow from banks to complete up and coming contracts. It spiraled out of control, and a company that was still being paid millions, went into administration. So, you see, you could be the biggest company in the world, and you could have customers flocking to you from all angles. But, if you’re not managing your debt, your company isn’t going to be able to move forward. We want to see more of you focusing on clearing your debt, rather than trying to make more money. If you have a steady flow of customers are the minute, you don’t need to worry about pushing for sales. All you need to worry about is clearing your debts down slowly, no matter how big or small they are. Think of it like your personal finances, you just need to clear them down to give yourself a clear head, and a clear run at being the most successful business you could possibly be.

Lack of Customer Care

Again, something big companies out there are failing with at the minute. Customer care is the one thing you should be focusing on, as it doesn’t cost money to perfect. All you need to do is know what your customers want, and what you’re not giving to them at the minute. A lot of companies fail to give their customers around the clock support, and that’s exactly what customers are looking for. Whether you’re selling a service or a product, if something isn’t done right, or working right, your customers are going to be looking for the quickest solution. When you aren’t there to help them out, the frustration builds, and frustration leads to those angry phone calls that all companies seem to get! So, if you want to improve your customer care, you need to have a look into a 1800 number. It allows you to create a completely new number, or you can keep your old one, but all of the calls outside of office hours are redirected. Yes, it might mean that you’re going to have to take time out of your day, or even your employee’s days, to manage a phone outside of office hours. But the result is a customer service option that not a lot of companies offer out there. The main reason being that it is a bit of nightmare to manage, but if you want to go above and beyond for your customers, this is the way to do it! This is a really good tool to use if you’re planning on taking your company international. Obviously, you’ll be working with customers in very different time zones, so having someone that they can talk to, even just for a few hours of their day, is better than them having to work around your times. It’s just so much more professional.

Contract Failures

Your business is going to have some contracts with some people along the way. It might not necessarily be your customers, but it could be with the people that you outsource to. Although, for those of you who do have contracts with clients, such as those that would be created in the construction industry, it’s important that you manage them as well as you possibly can. It’s so easy for cracks to show in a contract, and if one fails for whatever reason, you run the risk of actually running your business into the ground. Once a contract is signed, business starts, and as soon as business starts, money is being spent. It’s money that you can’t afford to waste, so we highly recommend that you have a contract manager on your team to help you understand what needs to be done, and to fix any problems when cracks begin to show. Having a contract manager or two on your side also allows you to have more time to create new contracts. The more you have, the more money you can make. But be warned, the more you have, the more money you could potentially lose. Your contract should be legally binded, and we do recommend that you put some kind of fail sale in place, so that if the contract falls apart, you don’t have to deal with the consequences of losing the money.

Production Costs

Production costs should be as low as possible, but for some companies this is where the most money is lost. Production costs can only be estimated, they can’t account for when things go wrong, and delays seem to happen. So, circling back to the first paragraph, debt can easily occur because of production costs, and you need to find ways to minimize the impact as much as possible. Streamlining your production line so that the chances of something actually going wrong, is so essential. You just need to find solutions to your problems, and put them in place so that the issues you’re having don’t occur again! If you find that your production costs are high without having any issues, then you need to find a way of cutting a few corners. Whether it be using software that streamlines things a bit for you, or whether you outsource a few of the things to save time, which should therefore save money. If you keep tweaking things, you will eventually find a system that works for you.

Bad Ideas

Bad ideas definitely do bring a company down. It all depends on what the bad idea is, and what part of the company it relates to. The biggest problem that companies have is rolling out a new product that just isn’t right for the customers. It doesn’t make any sales, and a lot of money can be lot from it. All companies have that one dead product, but you don’t want to make the mistake more than once, or even once if your company isn’t financially stable at the minute!

Featured Image from Shutterstock

Don’t Miss The Hottest News

Subscribe our Newsletter 1