4 Steps to Save Business from Collapsing

4 Steps to Save Business from Collapsing

4 Steps to Save Business fromCollapsing

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

The business world is quite unpredictable and there are severalfactors, both internal and external for business success and survival. Mostlysmall business failure depends upon the external problems like market slowdownor collapsing of the economy. Several startup owners focus on technical andprofessional skills instead of managing and build a process as this can cause afailure for any business. When a business owner fails, everyone associated withthe business like suppliers, investors, employees and customers also fails.

Here are a few stats and figures:

  1. 95% of businesses fail becauseof insufficient cash flow.
  2. Increase of the profit marginfrom 5 per cent to 10%
  3. Around 70 per cent of thebusiness sustains for 2 years, 50 per cent of them sustain for 5 years and 30per cent of them sustain for more than 10 years.
  4. Almost 40% of business ownersstrike cyber-attacks; only 20% of small businesses rate their ability tomitigate vulnerabilities, cyber risks and highly effective attacks
  5. Around 60% of the entrepreneursstart their business at home while around 10% of owners of small businessesclose each year

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

  • Manage Cash Flow

In the initial stage, many businesses struggle with cash flow sobusiness owners should keep a balance between getting cash through sales andcovering their expenses. When an organization faces negative cash flow for along period, the effect on the business is the same as that on a person who ishaving excessive loss of blood flow which are lethargy, incapacitation andeventual death. A budding startup must do whatever it can to keep the cash flowpositive.

  • Builda strong business plan

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

  • AvoidHigh Debts

Taking a loan or other forms of debt can be a double-edged sword forany startup. Most of the companies depend on credit at the initial level butthe problem arises when the time for repaying the loan comes. When a businessowner uses most of the cash flow on repaying debts instead of expanding theirbusiness, it loses the flexibility to keep up with the market.

  • Makeaccurate projections

Most of the entrepreneurs have a positive mindset and they believethat their idea can change the world and it should be like this. However, thisoptimism can often lead them to overestimate their potential revenue andunderestimate their future expenses. Because of these impractical projections,a business owner can make bad decisions that can hamper their business. Everyentrepreneur must predict the future revenue and expenses according to theavailable data to keep their dream to change the world alive.


Having the motivation and enthusiasm to build something that has thepotential to change the lives of people is not enough, one must learn to manageand run a business to be successful. Many businesses fail in the first yearbecause they start with enthusiasm but fail to build a process. Therefore, ifyou want to build a business you need to make a process for every departmentand remember, nothing is going to happen for few years but if you keep onlearning and evolving you will be successful.

Below are some management quotessaid by major business leaders

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

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

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

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

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

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