If there's one thing the entrepreneurs andexecutives do every day is to make decisions. The corporate world lives by making decisions and unfortunately you can not predict what will be the future decisions that companies will have to take.If only it were so everything would be easier and the risk of the companies would be minimized because she would have time to prepare, study and analyze the options and then make a decision.Wrong decisions are common, especially for entrepreneurs, and can bring many bad consequences for businesses, as well as in our own lives. We make decisions that can change the course of our lives and it would be no different with companies.
Thinking in this world of decisions and indecisions that companies spend routinely is that two American entrepreneurs, Luke Johnson and Jay Goltz wrote about the most common mistakes that can implode a business - especially if small case, reported in the Journal Times Business - issue 35 , which I describe below with some of my considerations. Let's see, what are the ten problems highlighted by the duo, adapted to the Brazilian context:
1. chronic debt: With the economic recovery, many entrepreneurs see an increase in debt as a worrying situation - which is not true. Entrepreneurs need to be clear of the reasons of debt and the destination of the funds raised through financing and loans. If the debt is actually higher than the company's ability to pay it, we recommend an immediate renegotiation. I add that one must calculate before what will be the cost of a debt. I have seen many companies who are afraid to get third-party resources or just take third-party funds and keep their capital intact. It needs a balance and before you go into debt with third parties calculate what is the opportunity cost of that debt or using the equity.
2. Partners and wrong employees: In many companies there is a problem that ends not always well: disputes between partners. Never enter a business without a written agreement. I have talked about society here in Success (click here) and reiterate the importance of being careful before choosing your future partner in a venture. The same applies to employees. Hiring the wrong employee can also be explosive. If you are not directly responsible for hiring and train the staff in charge of them. I find it important not only to hire the employee with the requirements for the position, but also hire the expertise that combines with the company's values. It's a good way to avoid future problems.
3. wrong Counter: The main counter task is not to release data in records books, but assist the company in the analysis and strategic business decisions. He must have a thorough knowledge of the activities of the company which advises. An unprepared or outdated counter is a very high risk. A good accountant will help you at strategic times and will be key piece in decisions involving his competence.
4. excessive dependence: It is common among small businesses, dependence on a single customer. If she loses, problems can be uncontrollable. The answer is to diversify the clientele.Another tip: as a supplier, try to be irreplaceable. Thus, the risk of being cut by a customer decreases. Also not hesitate to seek new customers. Give the guys at the market so that your company can diversify clientele. Make sure you're going through a consistent image to the market and be sure to build a branding your company.
5. Chaos IT: investing a small fortune in poorly performance of computer systems is sure road to disaster. Seek a provider who not only have technical background but also inspire confidence.
6. Entering a price war: The granting of aggressive discounts can become a suicidal strategy. The only winner of this battle is the customer, which is spoiled by the ridiculous prices. In contention for the customer, try to offer other advantages. The price factor is the most risky for the health of your business.
7. expensive Rent: You enthuses, and rents the home of your dreams for the business. This can be a time bomb. It seems obvious, but a business should never be started or expanded without a revenue assurance. I understand that the dream that beautiful office, which occupies the entire floor and is the envy to competitors is latent in you, but you must have patience and do not take bigger steps than their own feet. Be patient, Battle and fight to get the office always dreamed of, but do not be thrown out in a few months of his own dream.
8. Insurance: Errors are common three problems in connection with insurance. The first, to understand the relationship between the insurance value and the value of what is held in the company. The second is not to predict lawsuits filed by employees on issues such as bullying.Third, do not be protected against loss of income.
9. Become unsympathetic: It's not just the poor customer service that drives away customers but also subtle attitudes like not accept credit cards from certain flags or be inflexible in the forms of payment. They are fully justified decisions, but can irritate customers. It is also important to pay attention to how your employees are serving customers. It has to go to them that never a customer should be treated differently or discriminated against.
10. Do not innovate: Some companies are too afraid to tinker on what is working and why not innovate, do not leave the place. The complacency usually installed in companies with astonishing speed. In some cases it is even instill healthy business in a slight state of paranoia, as advocated by the founder of Intel, Andy Groove.
Of course, the decisions in the business world are much broader and involves many more variables - and are different in every company and in every environment. But these ten mistakes listed above are common to a lot of companies that at some stage in their life cycle had to make decisions and have sometimes erred. Entrepreneurs take hundreds or thousands of decisions a year, many of which seem inconsequential, but be aware of the smallest details can make the difference, thus ensuring the survival of the business.
