Why most Businesses Fail

[AmorsoloX]

Amorsolox, I add ni sa failures in business

7.) Weak Leadership can cause failure in business.

for me, its falls under no. 3.. LACK of ORGANIZATIONAL PLAN....

3.) LACK OF ORGANIZATIONAL PLAN
it must be clearly defined kung who does who and who answers to who.. it must be clear especially on partnerships and corpos that there must be one who ultimately calls the shots.. group think is a big no-no.. but members must contribute facts to the decision maker, if there is too much democracy, chances are magkalatagaw ang decision making process.. if there is too much beurucracy pud, dugay kaau.

a person must have his/her set of duties and responsibilities para wala conflict of interests and conflict of procedures.. tungod aning lack of organization, grabe kaau ineffeciency.. dili mka expand ang negosyo.., dako pud kaau waste..

lack of leadership is same as unorganized leadership.. when there are too many "leaders".. there can only be one leader, all the rest must follow that person..

lisud ni himuan example.. most large medium and businesses have an organizational charts.. basically its like an army.. where the soldier answers to his direct superior, where that superior answers to a higher officer.. all the way to the chief of staff..

you really dont need amazing leadership.. you just have to organize well..

[AmorsoloX]

4.) LACK OF FINANCIAL DISCIPLINE

this is a very common mistake.. simply put.. kanang ang profit sa whole business gamiton daun for personal expenses.. nakalimot sa capital recovery and capital growth.. dont think of a business as a job, think of it like a child, where you have to feed it, guide it, let it grow.. dont exploit it (too much).. what you are playing with is not capital alone.. you are playing with time..

you dont need to be a master in accounting or finance.. its just common sense.. learn to save.. by i mean save, what i mean is not to put your money where you cant pull them out anytime.. example.. houses, time deposit savings.. ang imu savings kay dili intended patubo thru interest.. its intended for survival purposes during tough times..

example: naa ko nailhan giinvest niya iya money from the biz sa usa ka fund, when nihinay iya negosyo, wala siya nakuha nga kwarta kay nka lock man iya money sa fund, and kung iya kuhaon, dako man pud penalty.. in short, na greedy cya kay gihurot niya invest iya savings sa usa ka investment vehicle..

never put your eggs on a single basket... (thats why i own several businesses and investment vehicles)

imporante kaau nga liquid kanunay imo assets.. cold cash is the blood of all businesses..

(many would have remembered that im not much of a mutual fund fan, its because for me, hinay ra kaau and ma tie up ang ako capital..)

[AmorsoloX]

If you want to build ang strong Financial Foundation, this is the solution below.


Inorder to have protection but you don't have enough income, find a way to increase your cash flow. There are two type in increasing your cashflow, one is reducing your expenses and lifestyle change and the other is create another source of income.
Get income protection(health, life insurance), eliminate debts, create 3-6 months of you income in the bank. And lstly build up your investment. You must have protection first before building you investments. Incase naay mahitabo sa investment, naay emergency fund ug protection.

hmmm.. i think wala na mention ang kind of insurance ako gi pasabot.. kanang business insurance bah.. kanang sa iensure imo capital and imu whole business operation.. iapil nlang pud dire and fire ensurance kay kung maugdaw imo tindahan.. kung wala ka insurance, your same as broke..

hmm.. imu solution is quite conservative.. that wont do in business.. what you need in business is an agressive formula...

increase casflow -> investment -> emergency fund & protection.. then repeat.. build your protection thru your investment.. you need something to protect to begin with.. and something to spend for protection.. its far better to find a goldmine first then to build a wall around it than to build a wall first then dig a goldmine..

think of it like a knight, you dont need protection at all time cause armor is heavy.. only wear it when you are going to battle.. but when going to battle, never forget to wear armor..

by debts, you may be referring to consumer debts.. but in business, debt is very important.. its your leverage.. paying debts is the last priority.. kung makaya, use debt as a capital, use debt to generate income for you..

practically, lisud jud kaau mag negosyo kung dili ka kamao mo utang..

example:
naa ka utang 1million.. imo monthly lets say 50,000, after pila ka months, naa nka money para pwede fully paid imu utang. lets say naa ka balance 400k.. para dili na mo gain interest, you decide to pay it fully.. so what if imu ipay daun, the enxt month after, mohinay imu biz.. patay ka, coz wala ka capital.. never rush to pay your debts fully cause this would create strain on your capital..

you are playing with money against time here.. its better to lose money than to lose time... money you can recover.. time never

[AmorsoloX]

5.) GIKAPOY ANG BUSINESSMAN..

lets face it.. grabe jud ka stressful ang negosyo.. naa jud times nga ganahan na ang owner mo stop and take a break.. so stop ang business..

this usually happens kung wala pud organizational planning.. where the business is too dependent on the owner/starter as a decision maker..

another would be the personality of the businessmen.. naa baya jud panahon nga ang imo profit from the business kay mas gamay pa sa salary sa imo trabahante.. kinhanlan jud perseverance.. mao ni panahon ganahan ko mo stop..

[AmorsoloX]

im not much of a "living below your means" guy.. i prefer to increase my means.. never live life cheap, practice economy.. good things in life dont often come cheap.. but wasting money is not good either..

[rambutan]

you are playing with money against time here.. its better to lose money than to lose time... money you can recover.. time never

boss ask lang ko ani.. if ani ang situation ba.. if you pay the whole amount, you can eliminate the interest building up sa imu utang. ang money na nitubo from time nga wala ka nakabayad is also a factor diba?
kasabot ko sa imu part na "may bukas pa" ang style,, murag ayaw ihatag tanan coz may bukas pa.. if wala na ka today, unsa nalang ang mahitabo ugma ? sakto ko? hehehe
pero if cguro naa kay extra jud.. if you can pay the whole amount today, pay nalang.. kay sayang ang oras ug ang kwarta na mutubo sa imu remaining balance.

[lorenzoleo]

hmmm.. i think wala na mention ang kind of insurance ako gi pasabot.. kanang business insurance bah.. kanang sa iensure imo capital and imu whole business operation.. iapil nlang pud dire and fire ensurance kay kung maugdaw imo tindahan.. kung wala ka insurance, your same as broke..

hmm.. imu solution is quite conservative.. that wont do in business.. what you need in business is an agressive formula...

increase casflow -> investment -> emergency fund & protection.. then repeat.. build your protection thru your investment.. you need something to protect to begin with.. and something to spend for protection.. its far better to find a goldmine first then to build a wall around it than to build a wall first then dig a goldmine..

think of it like a knight, you dont need protection at all time cause armor is heavy.. only wear it when you are going to battle.. but when going to battle, never forget to wear armor..

by debts, you may be referring to consumer debts.. but in business, debt is very important.. its your leverage.. paying debts is the last priority.. kung makaya, use debt as a capital, use debt to generate income for you..

practically, lisud jud kaau mag negosyo kung dili ka kamao mo utang..

example:
naa ka utang 1million.. imo monthly lets say 50,000, after pila ka months, naa nka money para pwede fully paid imu utang. lets say naa ka balance 400k.. para dili na mo gain interest, you decide to pay it fully.. so what if imu ipay daun, the enxt month after, mohinay imu biz.. patay ka, coz wala ka capital.. never rush to pay your debts fully cause this would create strain on your capital..

you are playing with money against time here.. its better to lose money than to lose time... money you can recover.. time never

Conservative jud ako approach to finances para play safe ko una. Mag una kog sa protection then last nako ang investments.
Nindot ni na paagi kung gikan paka pag ka employee na mindset, hinay hinayon ka ani ug change to have a business mindset.
Mao na akong nabantayan based on my experience by following this steps.

[AmorsoloX]

boss ask lang ko ani.. if ani ang situation ba.. if you pay the whole amount, you can eliminate the interest building up sa imu utang. ang money na nitubo from time nga wala ka nakabayad is also a factor diba?
kasabot ko sa imu part na "may bukas pa" ang style,, murag ayaw ihatag tanan coz may bukas pa.. if wala na ka today, unsa nalang ang mahitabo ugma ? sakto ko? hehehe
pero if cguro naa kay extra jud.. if you can pay the whole amount today, pay nalang.. kay sayang ang oras ug ang kwarta na mutubo sa imu remaining balance.

yes, you would eliminate interest,, but your going to strain your capital doing so.. example.. if i have 400k.. instead of using it to pay off my debt, id rather invest 300k in another business, as to increase my income and reserve the remaining 100k for emergency capital..

the point is dili maau i strain imo capital.. kung kaya nimu mo bayad extra cge go.. naa ra man sa imo preference.. kung sa ako lang, id rather use the extra to invest. so in the long run, mas dako gihapon ako earnings kay sa ako masave...

[rts1980]

yes, you would eliminate interest,, but your going to strain your capital doing so.. example.. if i have 400k.. instead of using it to pay off my debt, id rather invest 300k in another business, as to increase my income and reserve the remaining 100k for emergency capital..

the point is dili maau i strain imo capital.. kung kaya nimu mo bayad extra cge go.. naa ra man sa imo preference.. kung sa ako lang, id rather use the extra to invest. so in the long run, mas dako gihapon ako earnings kay sa ako masave...

i agree on not straining your capital but maka dis agree ko nimu on onething, for me, i do not invest in another business labaw na nia paka utang sa isa.. it is not advisable to do business or going into business that way.. mao biya na nahitabo sa most business that were foreclose by banks kay tungod wa pa nakabawi sa ge utang sa pag tukod sa isa ka negosyo, mu abli ka ug lain napud using the money gain from the business na ge agi ug utang.. para nako bro, ako usa bayaran ang ako utang before venturing in another business.. maka tulog ko naka hayang kay wa nako utang ge huna2x an.. maybe that's how you do business pro lisod na.. labad pana sa tanan labad kay cge ka naa dapat apasun ug bayad.. pag tukod nako ug negosyo, wa nako ge agi ug utang mao bitaw, wa jud ko nag labad sa ako ulo kay maski dunay months na muhinay, dili ko mag guol kaayo kay wa man ko utang ge huna2x an kung di ang ako nalang mga operating expenses ako problemahun..

[AmorsoloX]

naghisgot nman lang ta about debts, capital and loans.. share lang nako ni..

i hope dili maoffend ang naa sa bad side ani..

i recently talked with a banker friend of mine.. ni abot mi sa topic about laon applications, it seems that the banks consider your profession or work experience as a basis for loan applications..

this is based on our little chat and what he shared to me..

these professions are very much welcome in banks for loan applications.. top 3 most preffered
1.) medical doctors (everybody gets sick man daw)
2.) pharmacists (everybody buys medicine)
3.) engineers n architects (dako kita ang construction)
these people in their fields are what the banks consider "profitable" and less risky..

but banks try to avoid people coming from these backgrounds. ranked from lowest
1.) lawyers - (banks just dont trust lawyers)
2.) nurses - (dili sab mosalig ang banko kay gamay ra sweldo, wala klaro mkatrabaho ba jud, and mostprobably mogawas ra)
3.) teachers - (tungod kay gamay daw sweldo)
policemen/soldier - (dead kung maigo sa bala)
4.) politicians - (deadz kung pildi sa eleksyon)


sa work experience,, he said, kung naa daw ka job before as call center agent, its goes against you.. dili daw mo salig taga banko sa call center agents. kung naa ka trabaho (any field) nga nihawa ka less than one year, murag ma discourage pud ang banks ana, especially if kadaghan nahitabo... and also, dapat clean imo police and NBI records and wala ka administrative cases pending.. (again, this is an opinion from a banker , loan officer)

im no expert on loan applications, but i think nindut ni ato ipost ang point of view sa magpautang..

in other words.. ang imo titulo, can be a leverage for or against you.. your reputation serves as an equity..