How not to succeed in business
As advisers to the business community for many years, we are in a unique position to see the various pitfalls businesses encounter at different stages of their cycle - and how many of them occur with depressing regularity.
Some of the more common mistakes we have to deal with include:
- Poor financial planning - especially under-capitalisation in cyclical businesses, taking out expensive high-interest loans, and withdrawing cash that in reality belongs to creditors or the tax authorities
- General failure to manage debt and cashflow
- Poor tax planning leading to unnecessary tax bills
- Inadequate knowledge of the market - especially the needs and wishes of customers and emerging market trends
- Insufficient awareness of competitors' strategies
- Lack of long-term planning when it comes to entering new markets and exiting existing ones
- Taking decisions based on wishful thinking rather than verifiable research
- Getting bogged down in overheads - using funds to purchase property and/or equipment instead of renting or leasing and using the money to earn money
- Failure to recruit or retain good staff - especially at management level
- Lack of management skills - especially when it comes to motivating and managing people, and delegating tasks to others
- An unwillingness to dedicate the necessary hours to keeping the business going
- Inadequate knowledge of and failure to comply with key legislation, regulations, etc.
- Inadequate record keeping
- Trying to save money by scrimping on professional advice
Sometimes these difficulties can be overcome, sometimes they prove terminal - but in almost every case they can be avoided if professional advice is sought in time. This is why we recommend our clients to come in for regular business reviews.
If you have not had a review recently, contact us to arrange one today.