In many cases if not all cases, we start business to get profits, do ploughing back, grow them and get more money, and be able to have money on us and sustain our lifestyles, right? I am sure we all agree on that.
But not all businesses get to this point of giving out stable profits or even standing for a long time and give you returns, and there are reasons why, these are the ones we are going to dissect and learn to avoid them.
Giving Out Too Much Credit
This is a vice that is common in starting or slowly growing businesses, where the owners try to impress the buyers/clients by giving them items on credit. This is not in a loan form, because the clients pay the money without interest. The problem starts to be evident after those clients do not pay for the items they took in time or never pay.
This means there is a huge gap in the chain of sale that is left being without being filled. At the end of the day, if the business has many clients that take items on credit, the chances of the business to stan for a long time are cut short. And in no time, that business will close up. Never attempt this in your business if you want it to thrive.
Getting a Loan Before Starting
This is one of the worst decisions one will ever make while starting up a business and hoping to grow it to the likes of Nike and more. Getting a loan to finance the starting of a business is like falling in an Ocean without knowing how deep it is. You may be lucky and the waters are shallow, or be unlucky and find the waters are deeper, thus drowning.
So, let us look at the negatives of acquiring a loan to finance the starting of a business. Remember, this is your first time to do this business, you have not mastered yet the art of operation, how to manage damage, losses and the rest.
If you get a loan to start this business, high chances are that when you meet hiccups along the way, it will cost you more resources to overcome them. Thus using more money you acquired from the loan to finish the hiccups. This means you are likely using the would be profit to finish the business’ problems.
More to this, you will be compelled to remove money from the business to finance the loan every after a month or any repayment schedule you follow. This means that if you wake up in a day and you don’t make sales, your loan repayment schedule will be affected thus losing on trust from your creditors and business to go down.
Employing the Wrong People
Yes, this is also a very important point to note if you want your business to thrive and it gets you the desired profit and start for a long time. You are supposed to hire right, not left. When you hire right, from the top management things will flow smoothly following the systems in place, but if you hire left, the reverse is true.
You should always maintain working systems that are supposed to be followed by all employees and remember to hire those employees that know what they do and those who understand the nature of your business and know how to rhyme along it. Failure to achieve that, you are headed for a disaster.
Your Business Location
This is very important, and it comes right at the beginning before anything else as you have to take your business where it is needed. When you take the right items to the right customer base, your business blossoms.
Take an example, you can not put an electronics shop in an area that doesnt have electricity installed. So, strategically locating your business matters a lot as it increases the chances of making sales, thus guaranteeing you for better profits.
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In a nuttshell, Let us learn from the above key points for our businesses to thrive and they give us returns. And it is healthy to keep studying the trends of demand to keep afloat the existing market.
