Avoiding Business Disaster
The possibility of bankruptcy and certain risks are just a reality for all businessmen. However, those people who succeed in the industry know that there are ways to reduce the risks in business and avert potential disaster that usually result to bankruptcy and dissolution of business assets.
In any business venture, there are always the risks and the possibility of disaster and bankruptcy. However, there are ways to reduce any associated risk especially when venturing into a new business.
Never tap the wrong target-market
According to business consultants, tapping the wrong target-market is the biggest mistake an entrepreneur can do that will inevitably result to bankruptcy. To avoid such disaster, businessmen should know the consumer’s demographics including their social class, educational background, religion, gender, and beliefs.
To tap the right target-consumers, businessmen usually resort to market research that will determine what type of people are the most likely to buy a certain product or service.
Never introduce a wrong product to the market
A comprehensive market research will also allow businessmen to introduce, improve, and alter a product that will reflect the wants and needs of consumers.
Meanwhile, businessmen should also be sensitive to the culture and beliefs of a certain market so they can introduce a product that will not be offensive to most consumers. For example, fast-food restaurant McDonald’s does not offer beef patties in India, a country where cows are considered sacred.
Hire only competent people
A successful company may not be successful in the first place without the competent people who are running it.
When making a hiring decision, businessmen should not only focus on professional experience and educational background of applicants but also on other qualities such as social skills, creativity, and work ethics. Meanwhile, they should also avoid making decisions which are not job-related.
Seek partnership with only business-minded people
One of the biggest and most common mistakes of people in business is seeking partnership with their friends and relatives. While this might work for some, remember that good friends and blood relation do not automatically make good business partners.
To be safe, only seek partnership with those people who are business-minded and have work ethics and professionalism.
Start a business with enough funds
A well-funded business has a bigger chance to expand and succeed compared to a company which has limited resources. However, people should make sure that the funds will go to a project which can multiply the capital, not reduce it to zero.
Also, businessmen, especially those with limited personal cash to finance a business, should know the right sources of financing which have the lowest risks (e.g. a bank which provides a low interest rate).
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