The business management of a start up? Here is our list of 10 classic bankruptcy cases to learn from if you are thinking of starting a business! What are the main causes of failure that a start-up can generally face? Let's find out now together by analyzing the following examples in detail: 10 more or less striking mistakes that entrepreneurs of young companies should never make. # 1 - Offer products or services of little interest In order for it to be possible to embrace a business management projected to growth, it is important to invest time and money only in interesting products and services for a significant share of consumers: if the public is not in the least attracted by the solutions proposed by our business, the chances that the same will amps and developments are drastically reduced. # 2 - Rely on partners and collaborators with too different ideas Anyone who wants to open a business with the aim of making it flourishing and profitable must necessarily pay close attention to the choice of members and collaborators to be included in the team. Having different points of view in a team can be an important resource; but if the ideas, objectives and approaches are too far apart, a strength enhancer can turn into a time bomb. Opening a business means sharing common goals, aspirations and the ways to reach them. # 3 - Don't prove aggressive and determined enough When it comes to doing business, having an aggressive and determined attitude (in a business sense) is often what makes the difference between those who will achieve their goals and those who will not even get there. All of us can feel a bit of dislike towards very aggressive or persistent sellers, but often it is these who knowingly how far they can manage to close impossible deals. We must be able to react decisively to waste and doors closed in the face, avoiding demoralization and keeping the goal in mind. # 4 - Don't consider the time it takes to raise money Since (in most cases) significant economic resources are needed to start a business, it is necessary to consider the time needed to raise funds from the beginning : contact investors or venture capitalists and convince them to finance a certain business project It is certainly not a simple thing, but by planning the objectives to be achieved in the short and long term (within a month to make the first agreement, within 2 to have an X sum, etc.) the difficulties are significantly reduced . Read also: Types of Non- Banking Financial Company (NBFC) in India # 5 - Not being able to make correct estimates If the founder of a commercial business fails to make estimates for the future that can prove to be acceptably truthful and concrete, he risks losing more or less considerable amounts of money: when, for example, we find ourselves hypothesizing the public's response to of a certain product or service, it is necessary to know how to recognize the line that separates what we want to achieve and what we could realistically achieve. The classic mistake of the beginner is to consider his offer so quality and unique that every potential customer is just waiting for his arrival, this without even considering the other offers on the market, the loyalty of customers to existing products or services, pricing, the location (in the case of physical exercises) etc ... # 6 - Don't have a long-term vision A good rule to follow when it comes to starting a new business is to establish even before the start of the objectives to be achieved in the short, medium and long term: real goals that allow the entrepreneur to grow his business in gradually and constantly, developing it as much as possible both internally (choosing an appropriate office, new hires, etc.) and externally (customer acquisition, advertising, etc.). # 7 - Investing too much money in risky products or services If, especially in the start-up phase, the owner chooses to invest a lot of funds on items or services that have not been sufficiently tested and validated by comparison with the market , he risks finding himself unable to manage a potentially deleterious negative return for the entire business: first to allocate considerable amounts to "innovative" or "unconventional" products or services, it is important to make sure that they work and interest our target. To this end, it is preferable to initially invest a minority of the energies and funds available for testing and gradually allocate an increasing effort if the feedback is positive . This model dictates that effort at work should be divided into the following ratio:
# 8 - Propose products-services too similar to those of the competition Proper business management requires (among other things) the ability to produce solutions that on the one hand (as already mentioned) interest the public and on the other is not a precise copy of the offer of others. An item identical to that sold by a competitor already known in the market can only attract if it is much cheaper on an economic level (in this case, however, you run the risk of devaluing your goods, obtaining poorer earnings and triggering a deleterious war on the downside ). The best compromise is the one capable of balancing important factors such as originality, usefulness and price. # 9 - Underestimate the importance of constant growth To open a business with the aim of transforming it into a successful company, you must focus every day on its growth : after creating a good customer base in the first period, it is therefore important to continue to focus on aggressive strategies that allow you to expand loyal audiences while increasing earnings and expansion opportunities. Favorable times can often lead to "sitting down” or investing too many resources in activities that are not growth but for example development. Growth continues, although slow is the one that will pay for development and that will protect the business in times of crisis. Read also: auditors in Dubai # 10 - Rely on the wrong investors To ensure prosperity for a certain business, it is necessary for the founder to find the right financial partners in the start-up phase: they are able to understand their role as a financier (the shareholder cannot think of intervening in technical matters if not has competence), who understand the business (there is nothing worse than explaining to a person who does not understand your business how you are spending their money) and who are able to understand the return on investment and which are according to the return plan. This is our list of 10 examples of bankruptcy to learn from: more or less widespread mistakes, which young entrepreneurs should avoid making in order to guarantee more successful opportunities for businesses.
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August 2022
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