Business Bankruptcy in America
August 18th, 2007 Subscribe To Our Feed
US bankruptcy statistics are out of control. Statistics show that business failure rates are falling while personal bankruptcies are skyrocketing. But in reality, the opposite is true.
Recently, a research team, including members from the Kauffman Group and Harvard Law School, published the results of a study concluding that the method used to collect US bankruptcy statistics was faulty, that in fact personal bankruptcy rates were lower than reported, and business bankruptcies were much higher because business owners use their own funds for their businesses, so when the business fails, it takes down the owner.
Why is business so shaky? It’s not rocket science, but much of the training we are exposed to is sales/front office concepts, and training in how to change how the owner or manager behaves.
Most of the training that is available is either in sales and marketing, or the touchy-feely human relations instruction aimed at changing the attitude and behavior of business owners. But there is very little in the way of preparation as to how to manage the internal operations of the business.
Where does the laundry go that you take to the dry cleaners? When you take something to be repaired, what happens to it? When you go to the airport, how in the world do they sort out all that luggage? How is beautiful furniture crafted in mass quantities?
Think about how small the lobby or customer service area is compared to the enormous size of the area it takes to provide the products or services they offer. Think about the tiny number of people that it takes to man the lobby compared to the vast numbers that it takes to produce and deliver the product or service. In the literature, the largest portion of the business the operation is ignored. Why? Because few of us know what goes on behind that door, accountants included.
Baby-boomers are getting ready to ‘retire’ in staggering numbers. The stock market of the early 90’s and today, along with the real estate market, have made small fortunes for many not-ready-to-retire retirees. The last ten years has seen these folks retiring from their jobs, and selling their California real estate in favor of Montana, Wyoming, and Colorado where twice the home costs half as much. And they have been investing the proceeds into starting a business for the first time.
Without the mentor that came with the family business years ago, these businesses are destined for failure. Bankruptcy statistics for the last ten years are bearing this out.
CPAs generally have business degrees, so does that make them the natural mentor replacements? No. Generally speaking, these folks don’t have practical experience running businesses other than their own.
They are great at capturing historical data, and reporting in a manner that is consistent with generally accepted accounting principals. They can file taxes. They can audit books to ensure that entries are made correctly and that there is no funny business going on. But they shouldn’t be asked for advice on how to run a business.
Small business needs generalists, but our higher education system focuses where their graduates can gain employment. Since small business generally cannot afford college graduates, the university system focuses on graduating specialists who will gain employment in the big companies who can afford them. And, rarely do new business owners have the time to attend college programs.
Why are bankruptcy rates so high? Because good people are resting their hopes and dreams on being able to access the wealth of knowledge about how to do it that should be available by now to everyone who asks. But they don’t know how to ask, and there are few good answers available and for a reasonable price on how to manage the work that goes on in the background of a business.
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Some More Reviews on Business
July 31st, 2007 Subscribe To Our Feed
With business marketing the benefit of joining a great support forum for people who are starting out in the internet marketing business is priceless. One thing that people just don’t realize when they decide to take their home based internet marketing business online is that there’s a lot more to it than meets the eye. Do you find that when you do market, it’s not consistent enough to bring you the results you want? Marketing your business is as important as what it is that you do and it should be your number concern.
On Business cards
The major difference between corporate credit cards and small business credit cards is the matter of who is responsible for repaying the debt. Any employee who is given the authorization to use credit cards for business must be fully aware of the responsibilities that go along with this authorization. And an individual employee spending can be monitored and regulated through the use of small business credit cards.
Your business success
Whether your business specializes in Porsche luxury cars or temporary employment services, the Web offers you the opportunity to find people who are looking for what your company sells. And you should remember that each thing you do in your business will affect the image of your business.
The business networking
When you look upon networking events and business functions as an opportunity to meet new people, do some market research, and find potential clients, it can become a joy instead of a chore. If you are like me, and don’t enjoy business card exchanges, networking events, baby showers, or standard social gatherings, then by-pass them all and join a committee or get on a board. Though I am often accused of being an extrovert, I consider myself quite introverted, as I truly dislike social events and networking gatherings where I am forced to meet new people and mingle with individuals whom I don’t know.
Business owners
In 2001 certain newsletters readers were surveyed and over 20,000 business owners, senior level managers of privately owned companies and the trade association executives who support them did not know the right role to play in a company or business as a owner, which was one main reason their businesses where down falling. So it is very wise as a business owner to know your role in your business. Don’t leave every thing to your employees.
Business management
When talking about business process management consulting, policies specify the boundary conditions of decisions. The preparation of management accounts will provide a valuable tool on which the business owner can manage the business. And if the business owner is not competent to prepare the accounts personally, a bookkeeper will be able to easily provide such information, particularly if an electronic accounting package is used.
Business growth
Controlling the rate of business growth is difficult to do especially if you are moonlighting. But one of the keys of effective business growth is to generate profitable sales. Get commitment at the end of your sales presentations, and you’ll make heaps more happy customers and in the process get heaps of business growth.
Well, you could try either of those options, but have you fully analyzed what the cost to your small business will be. And on loans, would you, as a borrower of business loan, unnecessarily increase the cost of finance to your business, knowing well that the assets are being pledged and not sold out? The assets pledged in secured business loans are available for use by the borrower but can be worth your business growth.
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