When it comes to mishaps, businesses are not exempted. There have been numerous ruins in the course of business history that were either shocking or expected. It can happen to anyone from the smallest to the biggest companies, from the newly created to the long established ones. But what could possibly ruin a good entrepreneurial venture? AABRS has come up with a list of the most common downfalls and mistakes that any entrepreneur could make which will ruin their hard work and investments. Take heed and be sure you don’t fall into the pit.
- A Poor Accounting System and Procedures
Without proper recording, your financial reports will be misleading thus causing inappropriate and bad decisions to be made. At the same time, this can encourage fraud and theft within the organization. When the figures are wrong, you should downright be scared. Act fast and fix it.
- An Unqualified Finance Team
What could cause the presence of poor accounting, misleading reports, ineffective budgets and any other financial dilemma could be the presence of the wrong team. People and talents are what make any company strive. Make sure that you invest in the right ones.
- Loose or Unfit Standard Operating Procedures
Absence of procedures or even loosely implemented SOPs can be fatal. Yes, the effect may creep in slowly but over time, the accumulation of effects can hit you pretty hard. Keep them in check and always strive for improvement where needed. Don’t settle for okay. Always go for gold.
- Mindlessly Signing Contracts
Never sign into any contract if you do not fully understand every word in it. This pertains to every piece of document handed to you may it be as simple as signing the usual checks for vendor payment, loan applications or sale and purchase of fixed assets. You do not want to be bound in something that you have not fully agreed to.
- Banking Too Much on Credit
It’s okay to borrow or loan but that should be on valid grounds. Moreover, do not cross the point where you become debt heavy that is having your liabilities amount more than your assets. You need to be both solvent and liquid.
- Risking Everything on One Person
Last on this list, AABRS warns companies who risk too much on one person. One of the reasons that can put any entity into liquidation is the loss of a significant member to the organization whose absence brings peril and financial consequences to the company. Such loss does not only mean death but also retirement and resignation.