Setting up a business in the past was something that was considered straightforward. Perhaps even commonplace. But in 2016, thanks to the technical changes we see in the workplace, this is no longer true.
Running a business has become as much of a technical exercise as it is a social one. And that means that tried and tested methods that work today may not work tomorrow. The companies that find ways to adapt to these changes are the businesses that succeed. Everybody else eventually falls by the wayside.
The following are challenges that apply equally to the biggest Fortune 500 company to the smallest startup.
What is Voluntary Administration? It’s where you hand over control of your enterprise to administrators because it is insolvent. And why is it insolvent? Usually because of cash flow problems.
It’s an old adage that “cash is king.” But too few businesses take heed of this age-old advice. All too often companies focus on their yearly accounts. And because they look healthy, they neglect to consider their cash flow.
But at certain times during the year, cash flow can become a problem and can jeopardize the whole business. Managing how much cash you have in the bank at any one time is essential for paying wages and taxes.
At the moment, there are two significant forces at work in business, and they’re pulling in opposite directions. One of those forces is the force of change. It’s being driven by new technologies and production methods across all industries. Companies know that to be competitive in a decade from now, they have to start investing today. Often product cycles can be upwards of a decade, so securing long-term profitability is paramount.
But there is another, darker force: the force of inertia. This force is driven by increasing uncertainty in the world. Thanks to increasing globalization and financial crises, many businesses seek safety. They don’t plough money into developing products that will come out a decade from now. Instead, they focus on near-term goals, because this seems like the safe option. All the while, they’re undermining their ability to be competitive in the long run.
We often hear about how western countries like the US and the UK have “liberal market economies.” But this is not true for businesses. Government regulation tightly controls almost every business sector in these countries. Regulation impedes business, puts up costs and in some cases, denies access to entire markets.
Many companies don’t want to expand their operations because of regime uncertainty. They just don’t know what regulators will do next. So it’s best to play it safe than to expand only to find that regulation makes that expansion unprofitable.
Getting Great People
Schools may be churning out students with technical skills. But they’re failing to produce individuals with the necessary soft skills to work in business. Often people look great on paper, but working with them on projects ultimately turns into a nightmare. People who don’t fit can create big problems for your team and your business as a whole.