Have you ever heard that businesses don’t fail, but leaders do? Whatever way you say it, the fact remains that 8 out of 10 businesses fail mostly in their early years. While this may be true, there are also numerous cases of huge companies that have shrunk to the ground only to be acquired by rivals who seem to be getting things right.
Statistics show that the main reason for these business failures is poor management of everything including the following:
- Financial activities
Whether your own a deck construction company or a restaurant, poor management of your business means that you do not have full control of your finances. This means that you do not understand how your business finances should function and have no good records of your income and expenditure. The result is usually a poor cash flow and no financial checkpoints that could enable your business to rectify mistakes in time.
Many managers think that it is the work of the accountant to produce management accounts, but that is not their responsibility mainly because they only work on the information that they are given. It gets even worse you mix personal and business financial matters.
The employees of your business are paramount, and they can make the difference between a successful business and a failing one in two ways: productivity and morale. If you do not follow up with your employees regarding their productivity, there is a high chance that you will pay for the work that is not being done. Do you have a performance plan and standards in place? Are your employees meeting those standards? If you do not have a way of monitoring your employee productivity, it will not be long before you profits fall because of poor performance.
Another thing that constitutes poor management in terms of employees is bad treatment. Low productivity can be as a result of low morale due to unequal treatment by the management or poor supervision which does not realize and address the needs of employees. For solutions to all your employee problems including monitoring, time tracking, making payrolls and so on, try out this website.
- Books and records
How can the management of a business make good decisions if they are not based on the realities from data analysis? Successful businesses are now data-driven because they make decisions based on facts that are shown by the analyzed data. This data cannot be obtained by ineffective record keeping especially using paperwork.
The technology is there that can automate and integrate all business processes so that employees can perform their duties maximally and data from every department is accessed and analyzed whenever it is needed. So, when management fails to embrace technology, it will lead to a poor record collection, keeping and use.
The competition in the business world today is very high now that many of them have gone online. This brings the need for competent or experienced managers who knows exactly what to do and when to remain on top of the competition.
The fact that you are the world’s best photographer does not mean that you can automatically manage a photography business successfully. This is because you will need management skills and experience that will move the business forward.
Managing a successful business is not an easy task. Many business owners usually want to be ones managing their businesses, and because they do not have the required management skills and competence, they end up bringing it down within a short period. No wonder poor management is the main cause of failure for businesses around the globe.