Whatever your current business status, the only thing we can do now makes bankruptcy repairs/prevention. Because after all, the risk of bankruptcy of the business we need to be aware of early. Rent a Sydney bookkeepers to manage bookkeeping for your business so that no mistakes occur that cause huge losses. Besides, here are some of the causes of micro small and medium enterprises that go bankrupt that you should avoid.
1. Start a business for the wrong reasons
The cause of micro small and medium enterprises that go bankrupt the first thing you should avoid is starting a business for the wrong reasons. Is the main reason you start a business is to make a lot of money? Or do you think when you have a business, you can have more time with your family? If those two things are the reason, you should think again. Try you to start a business with the following reasons, so that the greater the chance of success.
– Have a passion and like what you do
– Be physically and mentally fit to face challenges that are bound to arise.
– Having determination, patience, and positive attitude. When others give up, you are even more motivated to move forward.
– Failure does not defeat you. Learn from failure, and use this lesson to achieve success
– Smart and Skilled in making decisions. This is needed to deal with problems that suddenly arise.
– You have a sense of accuracy and speed
– Caring with fellow human beings, so you can get along with all groups of people.
2. Bad Management
The second reason for micro small and medium enterprises going bankrupt is the poor management system in the business. Have you experienced this? Then, how do you become a micro small and medium enterprise business owner who can manage business management well?
A good entrepreneur will create a work climate that encourages productivity. He also can recruit competent people, train him, and delegate the right job. Good leaders are also trained to think strategically, make visions real, and are capable of dealing with change, making progress, and predicting the possibility of future events.
3. Lack of Business Capital
Business capital is indeed an important factor in the sustainability of a business. Not surprisingly, the lack of venture capital is one of the causes of micro small and medium enterprises that are often bankrupt. If the business capital is inadequate, certainly the operational activities of the business cannot run well, and eventually, it will lead to bankruptcy.
Novice business owners often wrongly estimate the need for money needed to run a business. Thus, it often happens that excess expenditure is not commensurate with the income earned. Eventually, they were forced to close down their businesses, before they could even profit.
To prevent this, it is very important to calculate business capital in detail in advance. Make sure you have enough funds to support your business until the profits from sales can cover all these costs. Make good books and have detailed financial reports, making it easier for you to make financial decisions.