Running a business is not for the faint of heart; entrepreneurship is inherently risky. Successful business owners must possess the ability to mitigate company-specific risks while simultaneously bringing a product or service to market at a price point that meets consumer demand levels.
According to the Australia Bureau of Statistics, there were 40,955 businesses registered in Tasmania as at June 2020. Of this there were 25,303 non-employing businesses leaving a total of 15,652 businesses employing staff in Tasmania. The majority employing 1-4 staff (9,833), with only 1,197 employing more than 20 staff.
Small businesses continue to dominate the Australian economy, with 99.8% of all Australian businesses considered a small to medium enterprises. The most common size for an employing business is to employ between 1 – 4 employees which makes up 71% of employing businesses across Australia.
Estimates are that one in three new small business in Australia fail in their first year of operation, two out of four by the end of the second year, and three out of four by the fifth year. The top five reasons were lack of leadership and management skills including poor planning, insufficient market research and sales skills, mismanagement of financials, underestimating the impact of externalities, and poor governance structures.
To safeguard a new or established business, it is necessary to understand what can lead to business failure and how each obstacle can be managed or avoided altogether. The most common reasons small businesses fail include a lack of capital or funding, retaining an inadequate management team, a faulty infrastructure or business model, and unsuccessful marketing initiatives.
Key points to consider –
- Running out of money is a small business’s biggest risk. Owners often know what funds are needed day to day but are unclear as to how much revenue is being generated, and the disconnect can be disastrous.
- Inexperience managing a business—or an unwillingness to delegate—can negatively impact small businesses, as can a poorly visualized business plan, which can lead to ongoing problems once the business is operational.
- Poorly planned or executed marketing campaigns, or a lack of adequate marketing and publicity, are among the other issues that drag down small businesses.
Signs that a business is failing include small levels or lack of cash, inability to pay back loans on time, inability to pay suppliers on time, customers that pay late, loss of clientele, and an unclear business strategy.
Managing debtors and cashflow are key elements of any successful business. At TCS we can help you retrieve your money from your debtors and manage the situation professionally allowing you get to preserve your relationships and get on with the job at hand.
We recognise that every business and every case is different. We invite you to contact us directly for a confidential and obligation free chat about the best was to approach your specific needs.
With over 140 years’ experience in debt collection and credit management in the Tasmanian marketplace, we have the right people, tools, and knowledge to make a difference to your bottom line. Get your debts under control quickly and easily by engaging our services.