Millions of people these days are trying to establish their startups despite having a simultaneous regular job only to make sure that their total gross income is enhanced. A startup of any magnitude is a great independent source, of increasing your income, and if you can establish the business well, you can also take it up as full-time work and ensure that your source of income through the startup is stabilized.
According to a survey, 90% of startups fail. The basis of any startup is the capital investment, and if you are trying to establish a business, there would be a certain amount of loan that you would have to get. The startup usually has a higher risk of falling victim to bankruptcy. There are different types of loan policies, and then there is a chance of loss at the startup, and hence the chance of bankruptcy also increases.
Main reasons for business failure among startups worldwide in 2021
In this article, we will talk about the steps that can be taken to avoid the bankruptcy of a startup. So, let’s take a look at it.
You may wonder what you can do to make sure that the profit is high while all kinds of expenditures are well managed. There are different types of expenses associated, and when you have a thorough understanding of these, you can easily plan your expenses well.
Here, we are going to guide you regarding budget management for any kind of startup as well as how to ensure that you can avoid bankruptcy no matter how many loans you have to worry about. There are many aspects of the expenses associated with the startup and when you have a clear conception of them planning the budget for your company becomes easier. The chances of failure of your startup lessen. You would also be able to take the help of the finance department for better planning too.
An Expense Management Software
Expense Management Software is another option that helps businesses, big or small, keep track of their expenses. They let businesses manage their spending, prepare budgets, manage various expense-related reports and do much more seamlessly which helps save much time.
Careful Planning of the Month
You may have different requirements every month, but when you have a proper plan about the expenses you would incur and stick to it, it becomes easier to understand how much you save as well as control the expenses as well. Plan the next month’s schedules and the possible expenses ahead of time and then try and follow the schedule to ensure that you are getting the best possible output from your company at the minimum expense.
This way, you would be able to keep track of every expenditure within the startup as well as have proper control over them. This is essential to make sure that your business can maximize the profit and hence paying off the loans would become much easier.
Secondary Income Source Till the Business is Stabilized
If you have a regular job or any other source of income apart from the startup, then do not let them go unless your startup is stabilized and is fetching home a good turnover. This would ensure that you have some other option to manage the debts when your startup fails and you are suffering loss.
If you do not have a secondary income source, you can as well look for it so that there is an alternative to handle your finance when there is any loss at the startup. Any of the family members too can join a regular job and together, you can pull the income and ensure that you have enough money to ensure complete security on the financial front despite paying for the debts.
Cutting Out the Optional Expenses
When you are trying to find out the different types of expenses that your startup has, you will discover several expenses that can be avoided or can be substituted with a cheaper alternative. Make sure that you are cutting them out and saving money.
It may seem less, but over time the amount that you have saved from such minor sources would be the reason why you can pay off your debt easily, and this is elemental to make sure the startup does not go bankrupt. This is a significant risk that people in business are afraid of and this is why many are apprehensive about establishing a business of any kind at all. The risk factors are often considered too high and simply not worth it.
Debt Settlement Lawyer
A Digital Banking and Lending Platform
Every startup and seasoned business needs a debt settlement lawyer for any relevant legal advice. You can hire a lawyer permanently, and he or she would be able to handle all your debt troubles for you.
The lawyer will help you with paperwork, and make the loan process quick and easy. They can help you get loans at a lower interest rate.
Conclusion
The failure rate of Startups is very high. Only a few remain in operation after a year or later as they have to shut down mainly due to bankruptcy. Proper management of expenses, settling debts, having secondary income sources, cutting out the extra expenditures, and hiring a professional lawyer can help you avoid bankruptcy.
FAQs
What can I do to avoid bankruptcy?
You can avoid bankruptcy of your company by:
Cutting excessive spending
Managed and planned Expenditure
Earning more profits
Settling debts
Using professional help
Do bankruptcies hurt your credit score?
Yes, your credit score can be hampered by bankruptcy as it will remain in the credit reports. This might change the way the lenders see you and it might result in them being unwilling to loan you.
What are the three most common causes of bankruptcy?
Running out of cash, not having a market need and getting outcompeted are the three most common causes of bankruptcy.
What is happening in Ukraine is heartbreaking and makes us realise how fragile our system and everything is. How easily we can be deprived of our daily routines and how we must be prepared for this from the start. Many people have lost their homes, their belongings, and their jobs.
The conditions are horrifying in Ukraine. Losing everything is scary. One must be fully prepared from the beginning if one wants to be safe during tough times, especially when it comes to jobs. These recent events have opened our eyes and made us realise the importance of recession and war-proof jobs.
During difficult times such as wars, epidemics, depressions, and so on, recession-proof jobs are ones that are largely unaffected even if all other industries are shutting down or losing employees. With the recent pandemic strike and now the happenings in Ukraine, people are shifting their interests towards these types of jobs, which provide a guarantee of employment and support no matter what.
This article will define recession, its causes, and provide examples of jobs that are both recessions- and war-proof.
Simply put, a recession is a period of time when the total global economy experiences a decline. During these times, people lose their jobs, companies go out of business, and there is an overall rise in unemployment. A recession lasts for several months till the situation gets better. The average citizen suffers the most from the recession, as a result of unemployment, rising prices, and a lack of support from higher authorities.
What causes a Recession?
There are many causes of a recession like deflation or loss of customers’ confidence in a company, but the major cause is economic shock, which can be due to natural disasters, terrorist attacks, pandemics, or wars. We have just faced a recession due to COVID-19 and now due to the Ukraine-Russia situation. Due to these types of events, a recession can happen and thousands of people can lose their livelihoods, that is why there is always a high demand for recession-proof jobs and businesses.
Following are some examples of recession-proof jobs and businesses:
1. Food and Beverages
Food Business
One thing that is vital for humans is food. If there are no food industries making food and beverages, then a humane society can not function. That is why even when there is a pandemic and everything in the world is shut down, the food industries are still booming and all the employees are there working. Food for eating and beverages for drinking is not something that can be marketed as unnecessary and put aside during tough times as everyone needs it to be alive.
2. Services in the Medical Field
Healthcare Services
People get sick and different diseases require medical attention, thus there will always be a demand for healthcare services. Survival in these difficult times will be impossible if medical assistance is unavailable.
Even during a recession, healthcare services will not be interrupted. People require medical attention the greatest during a recession. As a result, the medical business will never diminish. Doctors, nurses, and chemists are all in high demand during such times.
3. Renovation and Repair Industry
Repair Services
The renovation industry is always needed, no matter what the situation is. Because some things can only be fixed or installed by professionals. For example, if your phone breaks and needs to be repaired right away, it is an emergency that must be handled properly and fast, especially in times of war or epidemic. A mobile phone repair service is the only option.
Repairing electricity, installing a security system, and upgrading your home for increased safety or to accommodate weather changes all necessitate knowledge and abilities. And after a war, reconstruction of everything that was destroyed due to the war is required. That is why, in difficult circumstances, the renovation and repair industry is critical.
4. Cleaning Services
It’s critical to have the finest health possible through difficult times so that you can confront anything that comes your way. And keeping yourself and your environment clean is the best way to stay fit and healthy.
We, as humans, live in a world where personal hygiene is extremely important, which is why cleaning businesses will never fail or go out of business since people will always buy it. Cleaning materials are a necessity, not a luxury.
5. Baby Products
Baby Products
Parents cannot make compromises or sacrifices when it comes to their children. That is why, even in the face of adversity such as war or a pandemic, the need for infant products will never dwindle.
Parents cannot experiment with the items they use on their newborns since they require the highest care and delicate products. If they do, it may result in significant health concerns. As a result, baby products such as diapers, baby food, and baby soaps will always be sold and purchased by the general population.
6. Child Care
As previously said, parents cannot make concessions when it comes to their children’s health and well-being. As a result, healthcare for children and those who work with them will always have a career because it is one of the needs in difficult times. Children, who are the most vulnerable, require the most medical attention during a recession, like wars, etc. As a result, child care is extremely important and will continue to exist.
7. Consumer Goods
Even in times of war or pandemic, people require basic necessities such as sanitary napkins, toothpaste, laundry detergent, and a variety of other items to be healthy. Whatever happens, these things will continue to be sold, and the people who work in these businesses will continue to have livelihoods.
8. Services for Death and Funerals
During COVID-19, there was a surge in demand for funeral services. The funeral sector is the one that blooms the most during any recession, especially during wars and pandemics. Funeral homes are what people resort to when they have to say goodbye to their loved ones because no one can avoid death, and many individuals lose their lives during these difficult moments.
9. Senior Care Takers
Elderly Caretakers
Tough times like a pandemic or a war can be extremely dangerous for the elderly. And during these times the demands for senior caretakers such as nurses, cooks, cleaners, and other support staff get really high. That’s why it can be a great opportunity for people looking for a job that can pay even during a recession.
10. Hospice Workers
The majority of people die in difficult circumstances. Unfortunately, this is the case, but specialists must be available to care for those who are nearing the end of their life. Hospice workers are professionals who care for people who are nearing the end of their lives, which might be due to a terminal illness or old age.
Whatever the situation, people still need to be educated. Two of the most powerful instruments for overcoming the financial crisis are education and knowledge. Humans, as individuals and as a civilization, must learn in order to survive and contribute to the growth of their community. As a result, teachers and educators in all areas are valued highly and are unlikely to lose their jobs during a recession.
12. Public Transport Workers
Public transport is the best way to save money, especially during times of recession. Thus, public transport workers will always have a job and they will be even higher in demand. Even if the economy goes down, the professionals like bus drivers, train drivers, train conductors, and many more, will have their jobs.
13. Body Shops & Auto Mechanics
Even though there will be fewer personal automobiles and vehicles on the road, they will need to be repaired. What if you have to travel urgently, perhaps during a war or pandemic? The cars must be in good working order. That is why the auto mechanic position will not be eliminated.
14. Pharmaceutical Technicians and Pharmacists
Medicines are needed by all age groups. No matter what’s going on in the world, that is why individuals related to the pharmaceuticals field will never lose their job as their job is vital and plays an important role in a recession.
15. Law Enforcement
Law Enforcement
There will always be a need for police officers, detectives, federal agents, and other law enforcement officers because no one can take their place. Particularly during a recession, those with specialised skills in these sectors will be in high demand as the crime rate might increase.
16. Workers in the Correctional System
People working in prisons, parole boards, and other offices won’t be losing their jobs either, as their services are important too. Even in a recession, letting the prisoners out will only increase the problems.
17. Public Utility Workers
During a recession, staying connected to your loved ones and the outer world is the only thing that can reduce stress. As seen during the COVID-19 pandemic, one way to keep calm was to stay connected to your loved ones through the internet, phone calls, texting, etc. Different sources of entertainment are also important to keep your mind busy and distracted for a while. And these services are possible because of the individuals working in these fields. That’s why these jobs are never going anywhere.
18. Judiciary Workers
Courts will operate no matter what and the people employed there, like judges, lawyers, clerks, sheriffs, etc. all have their jobs intact and won’t lose their job. Even though some courts were closed for a while due to COVID-19, that was to control the contagious disease. Despite that, courts are always operating.
19. Firefighters
FireFighters
Accidents like fires will happen, and they cannot be predicted. So, in order to control that and save lives, a profession like a firefighter and all jobs related to this field will continue to exist even in a severe recession.
20. Insurance Professionals
Insurance Brokers
Health insurance is crucial to most people, and they will keep it even in a recession, so there will always be a need for insurance brokers and professionals in this industry. Not only is there health insurance, but there is also automobile insurance, which is required to legally keep your car on the road.
Actuaries help businesses cut extra expenses and keep the business running during a financial crisis. Individuals in this field will have their jobs as their services will be needed most by both private and government companies.
22. Social Workers
Social Workers
Social workers will be needed most during a recession as more and more people will be looking for support. Many people lose their homes and their livelihoods during a recession, which is why social workers and their services are needed.
23. Mental Health Experts
Mental Health Expert
During a recession, the normal population gets affected the most. That can lead to some serious mental stress that can cause problems, which is why mental health experts are needed during these times. Substance abuse also spikes due to these conditions, so the demand for experts in these areas can get high.
24. Divorce Attorneys, Mediators, & Arbitrators
Financial difficulties and stress can cause couples to split up and compel them to make difficult decisions. According to studies, the stress induced by a recession causes a high rate of divorce and separation among young couples. As a result, there will be a demand for divorce attorneys, mediators, and arbitrators to complete all of this work.
25. IT Workers
Even during a recession, there will always be a demand for IT workers because the entire world has become digitised and technology is now the driving force behind it. To keep the websites, applications, and other things working, all of the technicians, programmers, and developers will be needed.
26. Bankruptcy Attorneys & Staff
Attorney
During a recession, there is a high rate of bankruptcy. Financial crises are unavoidable. As a result, employees in this profession will not lose their jobs, as there will be a high demand for their services due to the high rate of bankruptcy filings.
Conclusion
Wartime situations demonstrate the need of being prepared and have a plan in case things go wrong. Having a job in a war-proof business can provide financial security and perhaps save your life and that of your family. As a result of recent events, more people are looking for recession-proof jobs, which can aid them during a downturn.
FAQs
What industries do best in a recession?
Grocery stores, Funeral services, Educators, Healthcare, Insurance, and Attorneys are some of the industries that do not get hit by the recession.
What are the top recession-proof jobs?
Attorneys, Child Care, Elderly care, Law enforcement, Firefighters, and Educators are some of the top recession-proof jobs.
What investments are recession-proof?
Gold, Bonds, and Cash are some of the top recession-proof jobs.
Businesses run on the three basics, Men, Money, and Machinery. If you are in a situation, facing loss. You will want to keep your head above the water. Devise a good strategy. Take some steps to look for what it is that has got your head into deep waters.
What is it that has made you stand in this position of loss?
You can analyze a lot of factors and make certain important decisions now.
What is it that you can let go of?
Is this important to you right now?
Can this help you improve?
Cutting this off will help you get out of this position?
Is it effective?
How does an organization cut down costs and increase their revenue?
Cutting down costs on activities that do not profit businesses means also cutting down the number of men in that sector. For example, if there is no longer a need for you as an organization to focus on the clerical department. You will have to eliminate the people working there, which will efficiently reduce the cost. It includes shrinking of a business or a part of it to enhance the overall performance.
The decisions you make have to be realistic and achievable. So, Lets look at What is retrenchment strategy and the companies that employed the retrenchment strategy.
To shift focus on activities from where revenue is generated and hence increase profits or simply because the operation, project, the service, product or the product line going on in the organization may not align with the core of the business.
To eliminate unnecessary costs that incur.
To ensure financial stability in the organization.
Who employs the retrenchment strategy, and where is it used?
The organizations use it on a linear or a collective basis. It is used in
This is also applicable to line extensions, operations, and projects that are being carried out in your business. First, let’s take a look at the three main types of retrenchment strategies:
1. Turnaround strategy
It is also called management measurement. The turnaround strategy is used when a business wants to improve its performance and decrease negative trends.
This strategy is used when the business might be facing:
A decline in the market shares.
Decrease in profits.
The issue of spending more money as an organization during a specified period.
Worsening debt-equity ratio.
Negative cash flow.
Decline in sales.
2. Divestiture Strategy
The divestiture strategy is adapted for when the turnaround strategy fails to yield results for a business. The divestment strategy analysis mainly the profit and profile factor. In an organization, the departments, products, services, or divisions are analyzed. Keeping in mind one question: Does this profit us? If not, then the company will let go of it.
This strategy is used when the company might be facing problems like:
The business started or acquired does not match the core values of the company.
When a tech upgrade is needed and the company is unable to do so.
It is struggling to survive.
The company might be running a business that is not profitable to the company.
3. Liquidation Strategy
This is the arrival of a business at its last stage. When no other options are available, the company sells all of its assets. As ugly as it might be, it involves total shutdown of a firm and will attract negative reactions as it also leads to consequences majorly including unemployment, of the people who worked there. Which also creates a bad reputation for the company.
To understand this more clearly, let’s take the Tata group as an example. It is a highly diversified entity with a range of businesses under its umbrella. A lot of which did not align with the identity of their core business.
The businesses that Tata ran for a specified time were soaps, detergents, pharmaceutical companies, and cosmetics. All of which were identified as non-core by the Tata group.
TOMCO (Tata Oil Mills Company) was divested and sold to Hindustan Lever Limited. The company was sold to Hindustan Lever, as it was non-competitive and would have required substantial investment for them to sustain it.
Tata’s Merind were divested to Wockhardt.
Adapting a retrenchment strategy might also be a company’s response to a significant reduction in demand for the product, product line, or the service it provides. Which would also include dropping off from the market.
Here are the Pros and Cons of Retrenchment Strategy:
Pros
It can layer, simplify, and flatten the organization’s structure.
Prove, cost-efficient, and improve performance.
Cons
It will create a negative image and reputation of a company.
Criticism and backlash from society.
Companies That Employed the Retrenchment Strategy
A list of 10 organizations that have adopted the retrenchment strategy for various reasons, overall enhancement and to run the organizations in their companies efficiently are:
Crisis management is a method that can be used for two purposes: as a way to help the contractor deal with a crucial problem that could cause severe losses; and also as a form of prevention against any type of crisis, preparing the company to deal with this situation.
In other words, this methodology brings together a set of strategies and actions aimed at minimizing, reducing, or reversing the possible consequences of these problems, which can range from economic to those related to the organization’s image.
But after all, what exactly characterizes a crisis?
According to a communication and crisis expert, this concept describes any serious event that breaks the normality of a company or causes an extremely formal impact, causing serious damage and even affecting people’s safety and lives.
Companies must always be prepared to give a quick and effective response in these situations, and for that, the first step is to know the main types of crisis that can affect your business.
Every company can be affected in different ways, there is no single source and in each of them, the answer must be as assertive as possible. Therefore, it is important to know the main cause of the crisis in the corporate world so that you can adequately prepare for each one of them.
Check out this brief description of the main causes of the crisis:
Economic or Financial:
One of the most common types to be seen, and occurs is when the company suffers a significant reduction in its business. When there’s more supply than demand, your profitability and revenue decline, and your cash flow or working capital isn’t enough to balance the bills.
Structural failures:
Structural failures are most often seen in large companies such as factories and construction companies. They are characterized by the failure of equipment or structures. In more serious cases, damage to families can result in the loss of life.
Rumours of sabotage:
Many rumours or accusations spread by competitors or even dissatisfied customers can cause significant crises in organizations, especially when spread quickly through technology and social media.
Reputation:
When internal and confidential information leaks to society, every company is at great risk of facing a severe crisis, especially if this data involves illegal issues about its operation.
Natural disasters:
Natural disasters like earthquakes, storms, floods can damage your business, causing operational and, consequently, financial problems.
With these examples, we can see how there is a great diversity of causes that can lead to a business crisis, whether internal or external. But don’t worry, we will give you fundamental tips, later on, to help you with this management.
How to Manage a Crisis in a Company?
There is no denying the importance of having good crisis management, but the big question that makes this process difficult for many professionals is: where to start?
Assertive crisis management must be organized and prepared with great care, which is why we have created a step-by-step guide that can help your company with this task. Check out:
1. Map the Company’s Risks
For your company to have good crisis management, it is necessary to carry out a complete mapping of all the company’s risks.
Raise the entire history of the organization and analyze the main issues that could affect it. It is important to simulate these possible scenarios to have a better understanding of what could happen and, based on that, devise the best strategies for each situation.
2. Create a Crisis Committee
Once all the risks that could affect your business are mapped and understood, the second step is to establish who will be responsible for this crisis management.
The leaders and managers should be in front of this command-line process, but beyond them, you have to define representatives from each sector of the company, who will also be responsible for dealing with problems that reach their respective areas.
After all, the crisis can affect the organization as much as a specific sector, so it is important to have an employee responsible for this task in each team.
3. Strategy Elaboration
Strategy Elaboration
Then, it is time to devise the strategies to be used in each crisis.
Establish the actions that will be taken, train the spokespersons responsible for each team, and analyze how information about the event will be transmitted, both internally to all employees and the press and the public.
With these actions, your company will be better prepared to deal with crises and solve the problem in the best way possible. Besides them, other tips are fundamental for this process and must also be followed to avoid mistakes that could compromise this management.
4. A Contingency Plan to Manage a Crisis
No company wants to face a crisis, but as we mentioned above, we are often subject to unexpected situations that will drastically affect our daily lives.
Therefore, all companies must be ready to deal with these unexpected events, not only through the strategies we mentioned above but also through a contingency plan.
Typically, it is based on risks that have already been identified and decided upon as situations that can critically impact the company, to maintain or restore the organization’s critical operations.
As an example, we can mention the coronavirus pandemic, which impacted and changed the routines of several organizations, forcing them to quickly adapt to this new scenario to ensure that their business continued to function.
In situations like this, the contingency plan must be activated so that the company can maintain its operations. At this point, all teams must be aware of the actions that will be taken to resolve the crisis and work together to put them into practice.
Good communication is essential not only for this plan but for all crisis management so that everyone is aligned on the procedures that will be taken. In addition, the organization’s response must be as quick as possible, as the longer it takes, the more difficulties can arise in solving the problem.
Finally, it is noteworthy that this process must be closely monitored by leaders or managers so that they can be sure that the necessary actions are being taken and that the desired results are being achieved.
5. The Importance of Internal Communication in Crisis Management
Internal Communication
In times of crisis, a small flaw, miscommunication or rumours can disrupt this entire process, and even bring serious consequences. Therefore, the first item that should not be dispensed with is internal communication.
In this process, HR must be concerned with being transparent and objective about the procedures being taken, and always be available for any queries that may arise.
Maintaining good internal communication will bring greater security to those involved, ensuring that employees are always aware of the organization’s position at these times, feel at ease, and know what is being done to fight the crisis.
How can HR Help in Crisis Management?
HR is one of the most important departments in the corporate world. As well as dealing with bureaucratic issues, the contractor is also responsible for a broad range of management that involves the welfare of employees. Therefore, in times of crisis, the professionals in this department are extremely important to contribute to the management’s focus on the internal public, that is, in establishing all the measures that will be aimed at the company’s employees.
These actions provide high-performance management, which will not only increase the teams’ performance but also contribute to greater motivation and, consequently, better crisis management.
Managing a crisis is not an easy task and requires a series of components to be able to minimize the consequences, such as good planning, preparation, and leadership from everyone involved.
Therefore, in this article, we explain the main crisis that can affect your business and offer tips on how your company should prepare to face these moments.
We hope that it will help you in developing a great crisis management system for your company.
FAQs
How do Companies Manage Crisis?
To manage crisis companies should develop a crisis management plan by assembling a crisis management team and ensuring strong leadership and training the employees.
How do you prepare for crisis management?
The company should be prepared for the crisis by recognizing a potential crisis, checking the crisis readiness, researching your company records, reviewing your social media status, building the image of key leaders, strengthening your key relationships.
What are the six steps of handling a crisis?
The six stages within every crisis are warning, risk examination, response, management, resolution, and recovery.
What are the three stages of crisis management?
The management of crisis can be divided into three phases are pre-crisis, crisis and response, and post-crisis.
The average life of a global enterprise is usually just 2 years; most of them fail and cannot survive after this time, due to different factors. Among them, we can find financial lack of control, bad administration, and a little vision to take them into the future. In the next top 8, we will be able to give you some tips to prevent your business from failing and even to boost it.
Researching the market is probably the number one step that every entrepreneur or business owner should take. This is as such a tool applied through surveys, evaluations, and file information, which allows knowing the real needs that consumers have, their tastes, preferences, and profile.
It should be done in order to know how the competition develops, what customers are they looking for and the opportunities they have to be a strong company. By having this information very well-identified, viable business models can be created and adapted, which by themselves are already promising for the future.
2. Take Care of Finances
Take Care of Finance
The administration of financial resources is very important to be able to support the entire business and prevent it from falling. The rules that must be followed include the constant review of the financial statements, the measurement of expenses and income, and taking into account the need for financing at some point.
In other words, every business that wants to accelerate its growth needs to obtain sufficient financial resources to achieve it. In one of the reports on credit and growth, we learned that only 40% of entrepreneurs focus their resources on strategies that can create long-term value.
3. Set Goals and Objectives
Set Goals and Objectives
It is important that you adhere to the business plan that you created, in order to have the goals and objectives established and to know where it is necessary to direct your business. In other words, this helps you know what you and your team need to do in order to take the company to the next level.
You can follow work methods in which everyone knows and defines their tasks to fulfil them on an estimated date, and thus obtain the improvement and growth metrics they are having.
4. Identify Areas of Opportunity
Identify Areas of Opportunity
Identifying the areas of opportunity is the only way in which a business can improve and be more likely to continue operating and attracting customers. Ideally, you should constantly get feedback from your customers, to know what your service is like, the quality of your product, or even what they need.
You must identify those aspects within the business that need to be improved, for example, manufacturing, administrative, or even maintenance processes, and think about how you can improve them.
5. Find the Differentiation
Find the Differentiation
One of the very important qualities that prevent a business from failing is its differentiation. By offering something totally innovative that makes the business stand out, it is possible to attract an endless number of clients and consumers who wish to satisfy any need.
Companies that manage to be disruptive stand out from their competition and even manage to change the development of their industry. In Latin America, different businesses have been created that start from being SMEs to achieving a big breakthrough.
6. Attract Customers Constantly
What makes a business work, in addition to finances, are the clients since they are the source from which the capital is obtained so that everything continues. There are different ways to attract them, for example, digital presence, different sales channels, advertising on social networks, and other marketing strategies that you can adapt to the vision of your business.
At this point, we recommend that you must know very well the profile of your clients/consumers and that your efforts really serve and turn into sales.
7. Startup Costs for Starting your Business
In addition to infrastructure and personnel costs, it is necessary to take into account the costs of setting up the company itself. The main expenses to start a business are the fees of the Board of Trade and the issuance of the permit, if applicable, in addition to others that vary between states.
The total cost by traditional means can vary from R$700 to R$2,000. However, the facilities of the internet already influence these processes and the costs to start a business online may be lower than that.
8. Working the “Fear” of the Risks of Starting a Business
Working the Fear of Risks
One of the biggest fears faced by the entrepreneur is making mistakes and, consequently, losing the money and time invested. Among the risks of starting a business, this one stands out. This fear usually arises from insecurity in making some important decisions that involve risks. The tip is: take risks, even though you are going to make mistakes. You might take wrong decisions and will make a lot of mistakes but this is natural.
It is estimated that out of 1,000 businesses, 800 fail in the initial stage of growth due to their negligence towards several crucial factors. Therefore, by following the above tips, you can increase the chances that your business will continue to develop in the market.
FAQs
What is the most common cause of failure for a startup?
The causes for startup failure are money running out, lack of research/being in the wrong market, ineffective marketing, bad partnerships, etc.
Why do 90% of Startups fail?
The major reasons behind the startup failure in India are lack of motivation, lack of funds, lack of focus, lack of agility, business model failure, etc.
How can startup failure be avoided?
The startup needs to be updated with the technology and the software that they are using. All the members of the company should communicate, motivate and channelize the energies of the team to be successful. By following this we can avoid startup failure.
What happens when Startups fail?
When startups fail they would apply those payments to any outstanding debts, liquidate assets to pay debts. In many cases venture, capital investors, and other investors will end up with the loss.
