...Business Mistakes and Failures Tynesha Walker December 19, 2012 Business Mistakes and Failures “Nobody cleared a path for themselves by giving up” stated Alacia Bessette (2010) .How do entrepreneurs and small business owners learn from their mistakes and failure? There are many ways they learn from their mistakes and failure. Everyone makes mistake but, mistakes are made to be learned from to better you in the future. There are mistakes like scheming over your business plan, putting too much money into it, and ignoring strong criticism. There are also many steps to rebound from your failure such as rebounding from failure and learning from setbacks, so let me explain. “The failure of an entrepreneur means the social death of the individual—not to speak of the consequences for his/her creditors, contractual partners, workers, employees, and his/her family”. (Roethe, T. 2012).When failure comes along it is heartache, but it is also one mistake you will learn from. After making a mistake business owners will get the idea of the things he or she need to do to become more successful and not make the same mistake again. Business owners must learn to accept their failures, understand why the mistake happened, and learn how to keep it from happening again. Many small business owners may be tempted to drain themselves dry when it comes to financing their business and much more. Failure of any kind can be a setback for entrepreneurs, but it doesn't have to spell disaster (Bartmann...
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...Summary: When you're starting a new business, the last thing you want to focus on is failure. But if you address the common reasons for failure up front, you'll be much less likely to fall victim to them yourself. Here are the top 7 reasons why businesses fail and tips for avoiding them. According to statistics published by the Small Business Administration (SBA), seven out of ten new employer establishments survive at least two years and 51 percent survive at least five years. This is a far cry from the previous long-held belief that 50 percent of businesses fail in the first year and 95 percent fail within five years. Better success rates notwithstanding, a significant percentage of new businesses do fail. Expert opinions abound about what a business owner should and shouldn't do to keep a new business afloat in the perilous waters of the entrepreneurial sea. There are, however, key factors that -- if not avoided -- will be certain to weigh down a business and possibly sink it forevermore. 1. You start your business for the wrong reasons. Would the sole reason you would be starting your own business be that you would want to make a lot of money? Do you think that if you had your own business that you'd have more time with your family? Or maybe that you wouldn't have to answer to anyone else? If so, you'd better think again. On the other hand, if you start your business for these reasons, you'll have a better chance at entrepreneurial success: * You have a passion...
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...many factors involved when there is a successful business, however, when a business takes a downturn that results in failure there are specific factors that can attribute to the outcome of the company’s demise. The closing of the electronic big box store, Circuit City is an example of a failed business. They were leaders in business for 60 years. Due to certain actions of management, this electronic retail giant, who was once the nation’s second largest electronics retailer was forced into bankruptcy on November 10, 2008 . 1 Circuit City’s success was built on a culture of discipline that practiced and followed the “4-S” model (service, selection, savings, satisfaction). “It was because of this consistency that Circuit City took off in the early 1980’s and beat the general stock market by more than 18 times during the next 15 years” (Collins, 2001). The slowly declining economy, housing market, limited available credit, unemployment rates, and increased competition compounded and accelerated the repercussions of the pre-existing problems that Circuit City faced started years before. Internally, Circuit City was already suffering from several years of declining sales. The Circuit City organization “made fatal mistakes which resulted in one of the most significant business failures in retail history. These mistakes undermined their own progress and ultimately killed them” (Eames, 2009 ). Today, many business leaders use this once thriving organization as...
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...Business Failure Analysis LDR 531/Organizational Leadership Business Failure Analysis Businesses are created with the intention to be successful, achieve goals, and create profits. The continuity of business success depends on the capability to forecast changes on markets and economies, and create a plan to adapt to change, if management failure to forecast changes, the business welfare will be unstable. Blockbuster was a leader on the movies rental business, and failure to reinvent as company, leading to failure. Business Failure Analysis determined Blockbuster’s vision and mission, indicators of the business failure and success from research, how organizational behaviors lead company’s failure, and how the role of leadership, management and culture of the organization in business failure. Business Failure Analysis explained techniques that Blockbuster must used to prevent the impending failure, identified potential barriers during the change process, evaluated the power and political issues within the organization, and described the steps followed to implement the organizational change based on John Kotter’s 8-step plan for implementing change. BUSINESS FAILURE ANALYSIS Blockbuster Inc. was an American-based home movie rental provider, and at its peak in the 2000’s had up to 60,000 employees and more than 9,000 stores. Companies objectives were achieved, become number one movie rental provider in United States of America, and spread their branch thru the world with...
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...days to get their hair fixed. She quickly got tired of doing hair because it wasn’t fun anymore. She knew that she had the passion to help people and she also knew that she like helping people feel good about their self. She started helping the nail by having their nails buffed and ready for them to do designs or polish their nails. What she then decided to do was to pursue her license in doing nails. It took her about a year in a half to get her license. Jackie would sit at the shop all day to learn and perfect the skills of doing nails. When her brother had an opening at the nail salon she became a nail technician. In July of 1996 her brother decided that he wanted to pursue the construction business. He wanted her to take over the nail salon where he would switch the business in her name....
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...2. Discuss the red flags for a small business related to business failure and bankruptcy. The high failure rate of small business start-ups is a major concern for many entrepreneurs, reason why they should be sensible to red flags in the business and the environment that may be early warning signs of trouble. Before engaging in new ventures entrepreneurs have to make sure that they are choosing a profitable sector, have enough cash reserves, and anticipate the price, the competitors, and the changing behaviors of consumers. Also, it is important that the entrepreneurs pay close attention to following red flags because they can be signs of bankruptcies: Finances are becoming so lax that no one is able to explain how the money is being spent. Directors cannot document or explain major transactions. Large discount are given to customers to enhance payments because of poor cash flow. Contracts below standards amount are accepted to generate cash. Bank request subordination of its loans. Key personnel leave the company. Materials to meet orders are lacking. Payroll taxes are not being paid. Suppliers demand payments in cash or in advance. Complaints from customers regarding the quality of product, service, or price. When an entrepreneur sees any of these signs he should immediately seek the advice of a Certified Public accountant (CPA) or an attorney, because generally unrelated one problem often lead to another one. Many young entrepreneurs...
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...Business Failures Why would my business fail? According to the textbook, there are 12 common reasons for the failure of new small businesses. This is not an inclusive, nor industry specific listing. Leadership Issues 1. Managerial incompetence 2. Lack of strategic planning 3. Lack of relevant experience 4. Inability to make the transition from corporate employee to entrepreneur Marketing and Sales Issues 1. Ineffective marketing 2. Uncontrolled growth 3. Overreliance on a single customer Financial Issues 1. Inadequate financing 2. Poor cash management 3. Too much overhead Systems and Facilities Issues 1. Poor location 2. Poor inventory control (Bovee & Thill, 2011) It is essential for any future entrepreneur to strategically plan the opening of a business. Strategically planning will help to ensure that your company has the tools and resources needed to be successful. Taking into consideration the reasons why most new businesses fail within the first year, it is essential to set the foundation for your company. Consider the following as a checklist of some of the factors that should be considered: What is your offering and market demand? (Write a business plan) What will be your pricing? Estimate how long it will take to make your first sale. Determine what your differentiators are. How will you market? Do you require any training? What are your financing options? Where will the business be located? What business structure...
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...Failure of Business Enterprises; Caused by Productivity or Management? RAJKOOMAR Manish Table of Contents Definition of Business Failure3 Closures and Failures: The Numbers3 Reasons For Business Failures Failure Due to Production Related Issues4 Failure Due to Management Related Issues5 Recovering From Business Failures8 Conclusion9 Definition of Business Failure Business failure is defined as the termination of a business that results in financial loss for at least one of the business's creditors. All entrepreneurs who decide to establish their own business face the possibility of failure, and a good deal of sources holds that failure is not only possible but probable for the small business owner seeking to launch his or her own enterprise. It has long been said that four out of five new businesses fail within five years of their establishment, for instance, but current studies indicate that such gloomy forecasts often present a false picture of entrepreneurial realities. Indeed, many business experts that the majority of small business owners are actually successful with their ventures. , The US Chamber of Commerce - published newsletter; Nation’s Business pointed out "Outright failures of small businesses are in fact remarkably rare." Moreover, Nation’s Business explained that "if failure is defined, reasonably enough, as a business closing that results in losses to creditors because the firm files for bankruptcy or because it simply closes its doors...
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...“A Study of Small Business Failure” Presented To: Dr. Roosevelt Ratliff, Jr. Action Research Facilitator By Shanika Williams ORGANIZATIONAL MANAGEMENT Cohort #34 In Partial Fulfillment of the Requirements For the Degree of Bachelor of Science TABLE OF CONTENTS I. INTRODUCTION…………………………………………………………………3 Description of the Problem………………………………………………………..…4 The Purpose of the Research…………………………………………………………7 The History, Setting, and Background of the Problem……………………………….8 Scope of the Research…………………………………………………………………9 Importance/Significance of the Research…………………………………………….10 Definition of Terms……………………………………………………………………12 II. REVIEW OF THE LITERATURE…………………………………………………15 III. DESIGN OF THE STUDY…………………………………………………………...26 IV. FINDINGS……………………………………………………………………………..27 V. SUMMARY OF RESULTS…………………………………………………………...33 VI. CONCLUSION AND RECOMMENDATIONS……………………………………..34 Bibliography…………………………………………………………………………….37 INTRODUCTION Why do some businesses succeed when others fail? While it may seem to be a matter of luck, in reality there are common mistakes that kill many small businesses before they ever get off the ground. When a business owner starts a new business, the last thing you want to focus on is failure. But if you address the common reasons for failure up front, you'll be much less likely to fall victim to them yourself. This is a far cry from the previous long-held belief that 50 percent of businesses fail in the first...
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...African Journal of Business Management Vol.6 (44), pp. 10994-11002, 7 November 2012 Available online at http://www.academicjournals.org/AJBM DOI: 10.5897/AJBM12.342 ISSN 1993-8233 ©2012 Academic Journals Full Length Research Paper Common causes of small businesses failure in the townships of West Rand district municipality in the Gauteng Province of South Africa Solly Matshonisa Seeletse Department of Statistics and Operations Research, University of Limpopo (Medunsa Campus), P.O. Box 107, Medunsa, 0207, Pretoria City, South Africa, solly. E-mail: seeletse@ul.ac.za. Tel: +27 12 521 4291. Accepted 17 October 2012 The study examined the high failure rate of the small business in the West Rand region of the Gauteng Province, South Africa. The purpose was to investigate reasons for lack of sustainability of the small businesses of this region. The study was qualitative, characterised by exploratory and descriptive modes. Fifteen small businesses were interviewed using an interview guide (at Appendix). The reasons for their failure showed that these businesses mostly lacked in business understanding. They showed shortfalls in business and management. Recommendations covered suggestions for these businesses to improve understanding and practice of the modern business mechanisms, to approach local business colleges for working relationships and training, as well as to involve management consultants to revive them to start generating the needed revenue and minimum profits...
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...Examining a Business Failure: Enron Examining a Business Failure: Enron Most people today have heard of the big Enron scandal through various different forms of entertainment such as television, radio, and the internet. Even those business people that never have time to watch the news heard some bits and pieces of the rise and fall of Enron. The basic issue that got Enron in trouble to begin with was the lack of good leadership and management. We know that insider trading is an unethical business practice. With that said, the big business executives and other members of the administration team at Enron had unethical business practices, and only one of those being insider trading. This paper will discuss the contributions of leadership, management, and organizational structures that led to the demise of Enron. Leadership, Management, and Organizational Structures Leadership has many definitions. According to Yuki, (2006) “leadership is behaviors, influence, interaction patterns, role relationships, and occupation of an administrative position” (p. 2). With this definition in mind, the average person can see the clear issues behind the fall of Enron. Csorba (2006) states that Enron’s management was built based on deception and lies. Even though some of the Enron leaders knew fraud and deception was taking place, like lifting conflict of interest rules for the CFO, they continued to look the other way and continued their employment and working dishonestly. One of the many...
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...Enron's Business Failure Abstract Business practices based on fraud and unethical behaviors can collapse a fortune 500 company. An important element in deciding a business’s success or failure is the structure and behavior of its key leaders. Enron was a successful corporation claiming revenues of almost 100 billion dollars and named in Fortune magazine as America’s most innovative company for six consecutive years. In this paper, specific organization theories can predict and explain Enron’s failures because of greed, lack of business ethics, and deception in what is considered one of the largest corporate scandals of the decade. Enron's Business Failure In July 1985, Houston Natural Gas merged with InterNorth forming the largest energy trading business called Enron (Thakur & Kalra, 2003). Based in Houston, Texas, Enron was a leading supporter of restructuring energy markets in the United States. Growing from a natural gas pipeline company into a marketing giant, Enron managed to build a large and successful organization consisting of more than 20,000 employees and boosting annual revenues of more than $100 billion. Despite Enron’s years of reported success; exposure of deceit, poor managerial business practices, and illegal activities of its key leaders led to the collapse of this marketing giant once known as the largest players in the energy trading business (Electric Power Supply association, 2012). Organizational behavior is the study and application of...
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...Examining a Business Failure The following paper will examine WorldCom and how the business failed. It will also compare and contrast the contributions of leaderships, management and the organizations structures to how the organization failed the way they did. WorldCom began as a small long distance telecommunication company and progressed into one of the largest telecommunications in the world and the second largest long distance company. It began as a small company in Jackson, MS by Bernie Ebbers and grew to become a darling of the new economy and of Wall Street. Failure within a large organization WorldCom was the number two long distance provider, in July of 2002 WorldCom file bankruptcy. This was the largest bankruptcy ever in U.S. history with a $41 billion dollar debt load, and more than $107 billion dollars in assets and equipment (Ramero and Atlas, 2002). Bernard John “Bernie” Ebbers the former CEO of WorldCom grew the company into one of the largest communications providers in the world. In light of his resignation from WorldCom in 2002 a Securities and Exchange Commission investigator found out that Ebbers and WorldCom admitted that he had inflated $3.8 billion and it also uncovered some $11 billion in fraudulent accounting practices that had fueled WorldCom’s rise. Ebbers entered the telecommunication industry providing long distance services in 1983 with a Jackson, Mississippi company formally known as LDDS. Ebbers grew the organization with a series of...
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...Minorities Businesses Ownership in USA: Successes and Failures Dr. Habtalem Kenea, PhD OM 250 4/24/16 Minorities in business have increased rapidly in the last decade. Businesses that range from domestic to technological are often owned by minorities from all walks of life. Minorities aren’t always African American; there’s a wide spectrum of businessmen and women alike, from race to gender. Wikipedia defines minority business enterprise as “an American term which is defined as a business which is at least 51% owned, operated and controlled on a daily basis by one or more (in combination) American citizens of the following ethnic minority and/or gender (e.g. woman-owned) and/or military veteran classifications.” In 2007, more than one-fifth of the nation’s 27.1 million firms were minority-owned. Minority owned business owners in America have seen its fair share of successes, failures and potential for the future. “The U.S. Department of Commerce 1997 survey of Minority –Owned Business Enterprise reported that there were nearly 2.9 million minority – owned businesses in 1997, generating a projected 564 billion in revenue by 1999 and employing nearly 4.3 million workers.” (Fraser, 110) The rapid growth in the minority business enterprise has been beyond impressive. The activity in the minority sector show a varying and rather impressive percentage of growth among the diverse group of business owners. Hispanic –owned businesses were the most successful overall minority...
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...1.0 introduction A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships. The legal definition of "small" varies by country and by industry, ranging from fewer than 15 employees under the Australian Fair Work Act 2009, 50 employees in the European Union, and fewer than 500 employees to qualify for many U.S. Small Business Administration programs. Small businesses can also be classified according to other methods such as sales, assets, or net profits. 1.1characteristics of a small business Not every small business eventually grows to the size of large corporation. Some businesses are ideally suited to operate on a small scale for years, often serving a local community and generating just enough profit to take care of company owners. Small-scale businesses display a distinct set of identifying characteristics that set them apart from their larger competitors. Revenue and Profitability Small-scale business revenue is generally lower than companies that operate on a larger scale. The Small Business Administration classifies small businesses as companies that bring in less than a specific amount of revenue, depending on the business type. Employees Small-scale businesses employ smaller teams of employees than companies that operate on larger scales. The smallest businesses are run entirely by single...
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