If your business is going through a difficult time, then you may be considering your options. To help assess your own situation, here are five common reasons why companies struggle…
1. STARTING A BUSINESS FOR THE WRONG REASONS Many people launch a business to try and earn more money or to give themselves a greater work/life balance, which means they often find it difficult when things pan out the way they do. Better reasons for starting a business include a genuine passion for the sector, because you thrive on independence and you have the determination and patience to succeed.
2. BAD MANAGEMENT Research has shown that the biggest reason why companies fail is down to how they are run. Experience is essential, but so it expertise. Both can be difficult attributes to obtain, but together they can give a business the best chances for success. Someone who is a strong leader and can remain fully-focused on the business, never missing opportunities and always looking to the company’s future will be well-placed to achieve success.
3. NOT ENOUGH CASH FLOW No matter what the size of your company, cash flow remains one of the biggest reasons why companies struggle and fail. While planning will help, if you find yourself without a good cash flow, then you may be forced to take action. Factoring and Invoice Discounting could be the right solution to help you avoid liquidity problems.
4. IN THE WRONG LOCATION Many companies get this wrong and never really understand why their company struggled. You need to find a location that’s convenient for your client base, well-suited to your industry (ie, if clients like to drive to meetings, you’re going to need free parking and meeting rooms), and not next door to a business that will overpower you in the market.
5. EXPANDING TOO QUICKLY Ambition is a fine attribute to have in business, but so too is sound business sense. Expanding and hiring can be the making of your empire, but get the timing wrong and it could also be the downfall. Establishing a solid base of customers and having good cash flow before you consider your next big step are essential.
If you’re struggling, then it’s best to seek advice and support as soon as possible. More information on invoice discounting and factoring could be exactly what you need.