From past experience as a consultant And always studied business and marketing Found that the business was broken There are only two things ruined, so this is the origin of the business article now. In the story that there should be many others who do not know, did not think or understand In what makes the business not going to survive In particular, people who start new businesses, SMEs believe that people must definitely benefit.
Both of which are often the main reasons for business ruin. “Can not manage !!” or “never manage” that doesn’t mean having a lot of knowledge and experience But means not paying attention or thinking, then it may feel strange to read How can investors do business to ignore it? And the word management is a bit broad In part, it is true that the word management is wide and there are angles that do not seem true. When people in the olden days did not manage Or what is the principle Has grown in many businesses
That’s because we don’t see the picture. Or have heard it, but didn’t keep in mind to connect Analyze consistency Which if it is easily seen and seen Nobody would be ruined. And / or perhaps these “two things to manage” are things that they “had” overlooked, “ but it already has an effect. (Actually, it could be 2 + 1, which is what 1 is in the end, please follow and read) By now let’s look at the first cause better. So that it will be easier to understand
… From the example mentioned above, it can be seen that Money management problem; It can happen with businesses, starting to do it while doing it, even thinking that it grows ..
1. Manage “money”
I don’t mean to think size WACC *, MIRR * analysis for various ratios *, it’s just a matter that is understood Doing business has to get money, but just “money out of money” is this careless. Don’t think thoroughly I believe that most of them think they are well thought out. Probably with ignorance Did not see the benefit at first that should be administered and then came to speak out at the bad “I don’t think I will ..” that has come through a lot of ears And hopefully I won’t hear from people who have read this article. This is not difficult. Take a look at each of the following cases.
(Name for the calculation formula for financial analysis)
Case 1: Many people have lost their horses since the word “break even point” is not a formula. What is a difficult financial technique, but it really makes sense, simply, “Is it worth it?” For example, a spa business that I consulted a lot at one time. The first thing the business owner thinks is How to decorate the shop? If you keep up with it, that is a huge (fixed) cost and most construction matters escalate. Because we are not an architect, not an engineer, not a technician. If it doesn’t follow the way, it will feel unattractive . (Ruined a little more will be alright) without even calculating that the restaurant has 2 million massage for 2 hours a day (or not) profit 40 per hour .. probably do not have to explain further. Of course, it was not that bad. But try to think carefully, 2 million, how many hours per day, how many people, and how many years… to pay back
Not just this business There are many others that look like creating a wishful dream. Shop face, business, place like this. This is not called a business because it thinks like decorating a doll house. I am not saying the shop decoration is wrong. Or not necessary But satisfying yourself is not an investment. If you say that doing this because of Physical Evidence is more like an investment, why? Because if you know the term Physical Evidence or Service Design that is not that deep. But it is enough to see that you still have some reasons and results in “investing money” .
All so In this case, yes, it is about dressing up the shop. Or invest in buildings only Every investment, especially in the first place You need to know how much is the break even point and when it truly means the future of business. In which the words I spoke until I caught my mouth at that time “It can be ruined in paper. Without investment. ” I mean, if you take the time to calculate it a bit before doing anything Because the results are incompatible with the fact that it must be ruined
Case 2 Cash flow, this matter may not be able to explain in detail. Speaking with a few principles, it is impossible to manage liquidity. Or unable to control variable costs But if you say (write), you can think of it as easily, that is, you can sell a lot, you must not forget that the expenses are too high. The sales volume is not a problem in this issue. Because this is only money
In the case of good sales Or enough business But did not survive because of the cash flow Caused by many factors, since “Leng” saw a lot of money and spent so wasted, there was “hurry to expand” without thinking carefully (back to case 1), there was too much debt. “Not worth paying the interest” as well as poor control of other expenditures, rent, wages, everything that is said about the business when selling things, but there is no profit like this. There is still another sub But may have to be at the end of the next chapter
.. All of this, I’m not just talking about the problematic money management. But it is the reason it is ruined. Really come together
Case 3, “Not enough income”, it’s all right, if it is said in no way That the income is not enough Business is impossible But in this case, it really means that the business is still able to pass. It’s not enough to feed the owner. Which is possible in either case With partner and no partner The matter of having a partner would not have to be explained much if neither of us had any other income. Business alone is not a loss. But it was not enough income. Profit is not enough for personal expenses It cannot be like this, it cannot survive either. It is like opening a shop to earn a profit of 5 thousand per month if not managing an accountant with his own salary before. Would mean The profit here is what the owner gets (only), it’s less than the minimum wage.
“Sai hemp” is considered yes in this case. Because if you analyze well The business today has not yet lost enough loss, although the income is not very good, but if given time or adjust the business strategy Marketing strategy It may continue to get better, but “no financial planning” is difficult to continue. Because if borrowed The borrower draws another way (perhaps already borrowing), it is likely that it becomes a cost because the interest is added to the second case
In which case 3 of this person who thinks of leaving a regular job Or leaving something in order to set up a single business, must be careful that Own income to be gained, must eat, and how can it be used A good business hemp line must have some just for it.
In fact, there may be more sub-issues or examples. However, we may see a wide picture From the example that said Money management problem; Can happen to businesses, starting to do it during work, even thinking that it grows
Believe that many people understand, see pictures or are thinking accordingly And I’m feeling the need to know How is management It doesn’t always have to be academic. Or perhaps know the formula How to calculate everything is good can be missed. We do not forget that people in the past, many masters or magnates People today do not have high education. But you will see that he is “thrifty, patient, prudent” or missed and learned. That when going back and reading each case again You can see that just being careless and prudent can help you escape both short and long term. However, keep in mind that I’m not just talking about the problem of managing money. But it is the reason it is ruined. Really come together
For today, let’s rest for this. There is still another story that makes it go bankrupt. What is it? See you in the next episode soon.