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Thread: Business fail rate

  1. #11
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    If i look back at many of the companies which closed... one thing stands out more than most ... expansion.

    It is actually sad to think that not one of the customers who helped me grow and survive all these years is still operating.

    Another thing i have found catches up with you... customers which over time just become part of the everyday grind ...i have found you tend you get slack with payment collections and eventually they go from COD to 30 -60- 90 days ... i have one customer i let go because over the years there have been a few factory builds... factory moves and then just machine repairs and because the outstanding money is small you tend to just let it go... until this customer just got out of hand ...in fact they have never settled their account... it is only about R4000 ...but 5 customers not paying R4000 become a problem... the catch is they take advantage and forget that they have tried other companies over the years and keep coming back because you know their equipment and control etc ( there is a manual star delta crank handle on one of the old lathes) there are not many sparkies around who can fix an old manual star delta and fit and program a PLC... most can do either one or the other.
    Comments are based on opinion...not always facts....that's why people use an alias.

  2. #12
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    Quote Originally Posted by adrianh View Post
    Staff are walking overheads - They will eat you alive - Have as few as possible.
    Or make a ton of cash ... something i have noticed with bosses ... many treat their employees like they are stupid fools... people just think because a person cant do a specific task they are stupid... the only stupid person is the fool who doesnt see that persons strengths.

    If you can find an employees strengths and encourage that person in their strength ...you have a gold mine.

    Between 1992 and 1998 ...i put together an efficient trenching team and made more money digging holes in the ground ...more than i have made on any other projects... back then we were charging R12 per metre to trench... digging 5 x 30 m long trenches and back filling... per day ... i was paying out R350 per day.

    I went to JHB to help out a crew to complete a project which got behind ... put together a good team ...we installed 4000 m of cabling in 3 days...when i contacted the owner to tell him i needed a lift home earlier than expected ... i got to sub contract on every project he worked on after that.

    Richards Bay a company got behind on a R14 million project ... i was asked out ...had a team of 75 people ...we were the only company which completed the project without penalties.

    My point ...get stuck in... find the team members strengths... and anything is possible.

    As you can see ...putting my thoughts on paper is certainly not one of my strengths

    I could employ a young tidy piece of stock to sit in my office and correct all my spelling and grammar... but then i might as well get a social media liason person to make myself look good all the time... how f%^& boring... become part of the flock.
    Last edited by ians; 12-Nov-19 at 06:30 PM.
    Comments are based on opinion...not always facts....that's why people use an alias.

  3. #13
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    Quote Originally Posted by ians View Post
    Or make you a ton of cash ... something i have noticed with bosses ... many treat their employees like they are stupid fools... people just think because a person cant do a specific task they are stupid... the only stupid person is the fool who doesnt see that persons strengths.

    If you can find an employees strengths and encourage that person in their strength ...you have a gold mine.

    Between 1992 and 1998 ...i put together an efficient trenching team and made more money digging holes in the ground than i have made any other projects... back then we were charging R12 per metre to trench and digging 5 x 30 m long trench and back filling per day ... i was paying out R350 per day.

    I went to JHB to help out a crew complete a project which got behind ... put together a good team ...we installed 4000 m of cabling in 3 days...when i contacted the owner to tell him i needed a lift home earlier than expected ... i got to sub contract on every project he worked on after that.

    Richards Bay a company got behind on a R14 million project ... i was asked out ...had a team of 75 people ...we were the only company which completed the project without penalties.

    My point ...get stuck in find the team members strengths and anything is possible.
    That may be true but my point stands - hire as few people as possible.

  4. #14
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    From my point of view... what i understaood to be the reasons behind some of the failures that i witnessed:

    A small company... business is booming in the location for a few reason ...everyone knows where they are... there is plenty safe parking... wide variety of stock ...shop owner was taking note of what the customers wanted and made sure it was available... customers like myself wanted the best quality high end stuff... i would get a little peak preview of what was available ...i had a book which allowed me to purchase whatever i wanted and just dropped off payment as and when i got more money... of all this the key to the survival which kept everyone going back ...the price ...parnter dies ...shop is moved to a huge shop ...plenty of space ...location was wrong ...parking was an issue ...prices went up and within 2 years the business was bankrupt.

    Another small company... big contracts are secured ...staff is tripled ...loans are secured and business is booming ... the small space is maxed out ...next door factory is acquired ...we are called in to do our thing... another operation is started doing something slightly different... it starts taking off ...the suits are on site... 2 days later a container arrives ...we are called in to disconnect all the machines related to this part of the operation ... sold ... and so the business grew ...another operation starts and a couple months later ...sold ...but during this time the core business is still function and making good money... the owner moves into a top end suburb ...new car... new motorbike and a few other toys ... a couple of years go by ... the company was making money ...how do i know ...because i keep connecting and installing new stuff... then i get the call... we are expanding moving to new premises ...my bank balance is popping at the seams from this project... business moves to massive premises ... owner takes a back seat ...while enjoying good fortune... i forgot to mention ...he employs a manger to run things while he is out of town ....most of the time...2 yeas later the company is bankrupt.

    Another small company ...household brand... not one of my regular customer... but word gets around you want the right person to move your factory ... so i get call... by this stage we can disconnect and strip the factory on a friday afternoon and have your factory running by 7 am on Monday morning... no matter how big or small your operation was (nampack took 3 months...because back when we did it ...we were still new at it)..."i had a good efficient team" ...first stop the chemist for a box of the red stuff ( to help stay awake) friday 4.30 pm we move in and start ....2 days of non stop work the main switch is energised...i go home to sleep... 6 months later i still havent been paid (in fact 15 years still not paid)... company is bought out by an organisation which apparently does this often... information about the companies financial woes is leaked and they move in ...spread the word which results in all the creditors calling in payments ...the financial burden becomes over whelming and they slide in make a ridiculous offer and take over.... the auditor who managed the account resigns and issued with brand new business cards labeled... manager.... was it the move to the bigger premises or the dirty deeds of the auditor? by the way the new owners went belly up and last i heard the new manger was scratching for employment.
    Comments are based on opinion...not always facts....that's why people use an alias.

  5. #15
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    What i want to read on this thread is real life stories about success or failure... what you think you did right or wrong to get to where you are right now... there are servers full of business advice... detailed plans of how to become a successful businessman...as i have mentioned before ...with a 98 % fail rate in business ...I dont know that the advice is for everyone.

    Simple things like ... i have a mate who takes 15 % of every single payment made into his bank account and moves it to a VAT bank account... on vat month he pays SARS directly from that account ...come end of the year whatever the balance is ...it is transffered into a money market account... is it the right thing to do ...does it have the best interest rate and all the other question the "smart " people are going to ask... what is more important ...is that he actually does it.
    Comments are based on opinion...not always facts....that's why people use an alias.

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    Ian the examples that you have given are similar to so many I have seen. The founder of the business gets complacent after making some profit. Buy a new car, house & boat and compete with the Jones's. When hard times come, staff gets retrenched and he keeps his high salary. I have seen this so many times!

    To be a successful entrepreneur one must have a passion for the business. You must believe in yourself and you have to trust a few people (not many!). Learn as much as you can and follow the paper trail; understand where the money goes. Stick to the rules and do not take short cuts. It may come back to bite you.

    I've learnt from Richard Branson to be kind, even to your enemies, you never know when you may need that person again.
    People do not remember much of what you have said, but they will always remember how you made them feel. So treat people with respect and dignity, even if you feel that you want to bash his head in.
    Excellence is not a skill; its an attitude...

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    One of the biggest down falls in business over the years is the loss of trust ...the good ol hand shake.

    People i deal with know one thing about me...my word is more valuable than any signed piece of paper... i have learnt over the years that a signed piece of paper is not worth the paper it is written on... generally the cost to recover the debt is drowned out by the legal costs.

    The simple things in life are normally the most important... sticking to your word is an asset which many people brush off.

    I have learnt over the years that there are very few people who are good for their word.
    Last edited by ians; 14-Nov-19 at 07:04 PM.
    Comments are based on opinion...not always facts....that's why people use an alias.

  8. #18
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    Quote Originally Posted by ians View Post
    One of the biggest down falls in business over is the loss of trust ...the good ol hand shake.

    People i deal with know one thing about me...my word is more valuable than any signed piece of paper... i have learnt over the years that a signed piece of paper is not worth paper it is written on... generally the cost to recover the debt is drowned out by the legal costs.

    The simple things in life are normally the most important... sticking to your word is an asset which many people brush off.

    I have learnt over the years that there are very few people who are good for their word.
    A written contract is an opportunity for an attorney to find loopholes and discrepancies as soon as there is a dispute and one party wants to screw the other. Most business people do not have a legal background and find it difficult to understand legal jargon. How often do we see people just signing a document without reading and studying its content.

    I have also been burnt by greedy investors in the past. My current business is run on different terms: no shareholders, no contracts. You buy from me or I buy from you. We pay on delivery and there is no disputes or misunderstanding. If the product does not work, we replace it or give a refund. The handshake and eye to eye contact is worth more than a piece of paper.

    If you do have to sign an agreement, make sure that it includes a description of its purpose and the intent of the parties (easier to prove in court) and that you understand fully the content of the contract. Take your time and get advice if all is not clear.
    Excellence is not a skill; its an attitude...

  9. #19
    Diamond Member Justloadit's Avatar
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    I pay myself a market related wage for the job I do. A number of reasons
    1) I get a steady income from the business, and can provide payslips when getting credit.
    2) Due to this it forces me to ensure that it is a cost in my business, and use it as an expense accordingly when working out running costs.
    3) I am forced to ensure that there is sufficient funds in the account to pay wages
    4) If I am away or get sick, I can hire someone to temporarily take over and am sure that there is sufficient funds to pay this person, as this is part of the business costs.
    5) It makes it easier to expand, where you can use this as a temporary finance. Be diligent to return to the payment of the wage!
    6) If the business can not pay this regular wage, then you doing something wrong. You have time to correct before it is too late
    7) Any extra money in the account after paying creditors is then your dividends/profit to use as you see fit.

    When ever I pay wages, I take 14% of the value of the wages and stick it away in my salaries account, and use this for year end bonuses and leave pay. Saves you scrounging around for cash at this time of year when there is a short December and January month.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
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    Quote Originally Posted by Blurock View Post
    A written contract is an opportunity for an attorney to find loopholes and discrepancies as soon as there is a dispute and one party wants to screw the other. Most business people do not have a legal background and find it difficult to understand legal jargon. How often do we see people just signing a document without reading and studying its content.

    I have also been burnt by greedy investors in the past. My current business is run on different terms: no shareholders, no contracts. You buy from me or I buy from you. We pay on delivery and there is no disputes or misunderstanding. If the product does not work, we replace it or give a refund. The handshake and eye to eye contact is worth more than a piece of paper.

    If you do have to sign an agreement, make sure that it includes a description of its purpose and the intent of the parties (easier to prove in court) and that you understand fully the content of the contract. Take your time and get advice if all is not clear.
    I lost around R2 million because i trusted someone... signed the documents without understanding the content ...you get this sales pitch ...its for your family ...you have to look after them if something happens to you and all that bullshyte ...what i didnt know at the time was how the commission worked for life insurance brokers and that it was the way the brokers ripped your backside wide open (apparently there have been new laws introduced since I was conned.)

    That dreaded day happened ...i had an accident ...thinking i had all the policies ...including disability ...within months ...the life cover attached to every single policy chewed up those policies faster than i could say help me... you live and learn.

    Let this be a lesson you dont have to learn... "never ever put life cover on any policy... rather have 1 separate life policy... my family would have been F$%^& well off if i had died ...considering all the life cover attached to each policy ...man that broker made a fortune...(by the way their commission come out of the first 5 years of your policy)... i had the cheque from Sanlam for R14.00 with the letter mounted in my pub for years (never cashed it) The letter stated ...due to your qualifications and years of experience ...the loss of use of your right arm will not prevent you from earning an income as a supervisor or lecturer... anyway we have moved on from that.
    Comments are based on opinion...not always facts....that's why people use an alias.

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