The business world is as enchanting as it can be ruthless. People all over the world get beguiled by its fruits of success. After all, there are hundreds, if not thousands, of influential and illustrious business personalities to make you want to be a part of their group. However, it cannot be ignored that the number of business failures overwhelms the success stories by a hundred times.
The kind of success a business can give you is unparalleled everywhere else. So, there will be more reasons for you to join the business league than be an outsider. However, before stepping into this savage world, you need to be aware of all the repercussions that can occur upon you, if you fail.
This blog will discuss not only the aftereffects of business failure and ways to combat that but also the reasons for the same happening. So, let us begin.
GROUNDS FOR AN ORGANISATION’S END
I’ll tell you an astounding fact, about a fifth of the businesses end up in failure in their first year of operations and about half collapse by the fifth year. These would come as a shock to many, but that does not change the facts.
There is something that all these establishments are doing wrong. Here are the three most common factors attributing to the failure of a business.
INCOMPETENT BUSINESS PLANNING
Any company would only work when it is founded on a plan that is both feasible and realistic. However, many a time, the impractical aspirations of the owner can lead to the demise of the company.
- Expecting high sales and profits in the first year
- Taking on more projects that the business can fulfil.
- Losing the business’ individuality by trying to replicate the more prominent brands.
These three are just a few areas where the business plan can go in the wrong direction.
LACK OF FUNDS
A business establishment needs adequate funds to keep itself afloat and operational. If it does not, then its future is going to be bleak. The business needs money for every aspect of its functions;
- To pay employee salaries
- To buy raw materials for production
- To pay the utilities of the office space
A shortage of funding will put a stall to all operations at once.
UNPREDICTABILITY OF MARKETS
Lastly, the extreme volatility of the business world and its uncertain nature can be attributed to the non-success of many companies. The three major complications that an owner may have to face but can never predict are;
- Change in government policies.
- Political instability
- And natural calamities
Right now, the coronavirus pandemic has severely impacted all forms of business activities in the world. Many aviation and flight providers have had to wind up their businesses. No one could have predicted that 2020 would take such a brutal turn. Hence, many companies, especially small scale ones, have had to face terrible repercussions.
IMPACT ON HOUSEHOLDS
The business and its owner are usually considered to be different entities. However, when a person puts his heart and soul into it, for him, it becomes his baby. A baby that he nourishes to grow throughout its life. So, if it were to die, metaphorically speaking, the owner also suffers a huge loss.
LACK OF INCOME OR NO INCOME
The families and households who have a business establishment, rely on it as their primary or only source of income. So when that business has to wind up, they suffer from a loss of income that becomes very difficult to compensate.
LOSS OF ASSETS
When any organisation declares bankruptcy or winds up its business, it still has to pay all its dues to the creditors. If the business does not have enough funds to pay them off, sometimes the creditors go after the owner’s personal assets. The property, jewellery, cars can be sold off to pay all the outstanding obligations of the company.
STRESS AND ANXIETY AT HOME
Without an income and any viable asset, there is a stressful and anxious atmosphere in the household. The owner is sometimes unable to accept his failure and can go into severe depression. The relationships and marriages have also ended with the end of a business.
It is utterly devastating to see a business and all the hard work of the owner go in wane with the winding up of a company. Nobody envisions that outcome when a business is established in the first place. However, the owners still have a future ahead, even if the business will not be a part of it.
WAYS TO OVERCOME THE SETBACK
There is not one problem in the world that does not have a solution. You have to look for the silver linings at the end of the darkest of clouds, and you will find one. The three things to remember when you face a loss like this are;
TO BE OPTIMISTIC
Do not let a single failure define you as a person. People tend to make mistakes every day in their lives. So what if your error is slighter more significant than most? You still have all your experience ahead to correct it. If you lose hope now, you will forget your chance of a brighter future along with it.
FIND WAYS TO STAY AFLOAT
Your business was your income source, and you have lost it. You will still need an income for your subsistence. There are two prominent ways to do so;
- One is to get a loan. Even if you are a single parent, you can still apply for emergency money for single mothers and no lender will deny it to you. There are plenty of other categories you can apply to as well
- Two is to sell the things you can, the things that will fetch you a reasonable price
Remember that this is only a temporary solution, for the long haul, you will need to step up your game.
START A NEW CHAPTER
After you have set yourself for a while, you will need to think for the future. You would have to ask yourself questions, questions that will help you write the new chapter in your life.
- Do you want to take on another business idea?
- Do you want to freelance?
- Do you want to work for another company?
The answer to these will help you get a clear picture of what the future may hold for you.
In the end, I want to say that failure is part and parcel of our lives. Its occurrence is inevitable. When you accept this fact and stop blaming yourself for it, you can find solace in your life.