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Top 5 tips for companies to safeguard against failure
The failure rate of small businesses is alarming. According to a UWC study, up to 80% of small enterprises never make it to their fifth anniversary in business. Failure to proactively plan and manage business strategy, as well as a lack of persistence, are often cited as the main reasons.
However, assuming that strong leadership, robust human capital processes, and strong sales and marketing strategies are in place, what other safeguards does a company need to avoid failure? Junior Biola, the chief executive of the Bitventure Group, provides the following top five tips:
Constant innovation
Innovation is crucial for business longevity. Companies must invest not only in the research and development of their core product or service but also in the systems and processes that enable them to function and compete globally. According to Forbes, the right kind of innovation can spell the difference between success and failure.
Mitigate fraud and risk factors
A company’s inability to prevent or mitigate both financial and reputational risks may lead to failure. South Africa has the unenviable rating of being the country most subject to economic crime, with almost one in every two transactions being fraudulent. Companies must install cybersecurity measures or partner with a company that can assist them in countering identification or verification threats.
Maintain control
Maintaining control of all aspects of the business may sound basic, but it is critical. Companies must have systems in place to control traffic through their servers and verify incoming and outgoing payments to protect against fraudulent activity. Vetting customers as they onboard and verifying banking details before attempting to collect payments via debit order or DebiCheck is necessary to prevent a loss of revenue at the collection stage.
Manage cashflow through better payment collection
Cashflow is the lifeblood of any business. A healthy balance of income versus expenditure is essential for a stable business. Companies must use products that remove the uncertainty around client payments, including identifying the best days to collect funds, to manage their cashflow.
Improve client retention
Properly managed and stored client data plays a significant role in tailoring services to meet clients’ evolving needs. Tracking customer activity and purchasing patterns enables a company to manage pricing, stock levels, product lines, and more, keeping them relevant and alive.
Small businesses that want to become big businesses and employers of tomorrow must learn to survive in an ever-changing commercial landscape. Fintech is one of the fastest-growing sectors, providing digital solutions to many of the challenges that beset businesses. Finding the right partners with the right solutions for a company may ultimately mean the difference between success and failure.
In conclusion, small businesses must have safeguards in place to avoid failure. Constant innovation, mitigating fraud and risk factors, maintaining control, managing cashflow, and improving client retention are crucial elements of a successful business. Companies that invest in these safeguards and partner with the right solutions providers will increase their chances of surviving in a highly competitive and constantly evolving commercial landscape.
