How to Avoid Failure!

Avoiding Failure
What could a business owner have do to avoid this problem? A few ideas include:
1. Seeking business advice from an independent party before embarking upon expansion to determine feasibility of the new venture;
2. Before injecting personal cash into a business, test the business on a professional financier.
If they won’t lend to you, you have to ask why. They usually know more about risk than anyone and their disinterest is a powerful signal that a business represents lots of risk.
3. Check the existing, parent, business was running properly before growth:
a. Make sure you have an organisational chart prepared to ensure everything is done properly;
b. Prepare proper job descriptions for all staff to ensure no gaps or overlaps, and you   have the right people in the right jobs.
c. Check profit sustainability before, during and after growth.
4. Ensure those managing/acquiring credit have training or experience;
5. Create budgets for those in charge of divisions to ensure each is profitable and contributes to overall profit rather than dragging down the rest of the business;
6. Ensure reporting and accountability for those in charge of each revenue/profit producing area of the business;
7. Ensure someone with experience is managing the cash and not keeping management in the dark;
8. Listen to your instincts and get help/advice quickly if you feel uncomfortable about a financial position.
Help and advice is not as hard to get as you might think. Many finance professionals are happy to have a no obligation discussion about your situation and advise if your worries are well founded or not. The head in the sand approach can be very costly for all concerned.