4 Steps to Save Business from Collapsing

4 Steps to Save Business from Collapsing
4 Steps to Save Business from Collapsing4 Steps to Save Business from Collapsing

4 Steps to Save Business from collapsing

Want to open a new business or want to scale your small business?

The business world is quite unpredictable and there are several factors, both internal and external for business success and survival. Mostly small business failure depends upon external problems like market slowdown or collapse of the economy.

Several startup owners focus on technical and professional skills instead of managing and building a process as this can cause a failure for any business. When a business owner fails, everyone associated with the business like suppliers, investors, employees, and customers also fails.

Here are a few stats and figures:

  1. 95% of businesses fail because of insufficient cash flow.

  2. Increase the profit margin from 5 percent to 10%

  3. Around 70 percent of the business sustains for 2 years, 50 percent of them sustain for 5 years and 30per cent of them sustain for more than 10 years.

  4. Almost 40% of business owners strike cyber-attacks; only 20% of small businesses rate their ability to mitigate vulnerabilities, cyber risks, and highly effective attacks

  5. Around 60% of the entrepreneurs start their business at home while around 10% of owners of small businesses close each year

So, how any business can sustain itself in this competitive market and avoid failure? Below we have mentioned 4 ways to avoid business failure at any stage.

  • Manage Cash Flow

In the initial stage, many businesses struggle with cash flow business owners should keep a balance between getting cash through sales and covering their expenses.

When an organization faces negative cash flow for a long period, the effect on the business is the same as that on a person who is having excessive loss of blood flow which is lethargy, incapacitation, and eventual death. A budding startup must do whatever it can to keep the cash flow positive.

  • Build a a strong business plan

The founding father of America, Benjamin Franklin once quoted that "If you fail to plan, you plan to fail." Well, no startup owner starts a business with a plan to fail but many of them fail to develop a plan. A strong and flexible business plan is the base of any successful company.

4 Steps to Save Business from Collapsing
  • AvoidHigh Debts

Taking a loan or other forms of debt can be a double-edged sword for any startup. Most companies depend on credit at the initial level but the problem arises when the time for repaying the loan comes.

When a business owner uses most of the cash flow on repaying debts instead of expanding their business, it loses the flexibility to keep up with the market.

  • Make accurate projections

Most entrepreneurs have a positive mindset and they believe that their idea can change the world and it should be like this. However, this optimism can often lead them to overestimate their potential revenue and underestimate their future expenses.

Because of these impractical projections, a business owner can make bad decisions that can hamper their business. Every entrepreneur must predict future revenue and expenses according to the available data to keep their dream to change the world alive.


Having the motivation and enthusiasm to build something that has the potential to change the lives of people is not enough, one must learn to manage and run a business to be successful.

Many businesses fail in the first year because they start with enthusiasm but fail to build a process.

Therefore, if you want to build a business you need to make a process for every department and remember, nothing is going to happen for a few years but if you keep on learning and evolving you will be successful.

Below are some management quotes said by major business leaders

"It's not about money. It's about the people you have, and how you're led." – Steve Jobs

"The best executive is the one who has sense enough to pick good men to do what he wants to be done, and self-restraint to keep from meddling with them while they do it." – Theodore Roosevelt

"Management is doing things right; leadership is doing the right things" – Peter F. Drucker

"Management is, above all, a practice where art, science, and craft meet" – Henry Mintzberg

"Good management consists in showing average people how to do the work of superior people." – John Rockefeller

4 Steps to Save Business from Collapsing
4 Steps to Save Business from Collapsing

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