Obvious causes of business failure. Sounds Familiar? Causes for Business Failure; you decide!
1. Lack of an effective board – and there are plenty of warning signs to indicate when boards are in over their heads for years.
2. Complexity: excessive complexity is often a root cause of corporate failure. When flaws begin to appear without being remediated
3. Poor Communications: corporate collapse has been spearheaded by communication lapses. After all, even the most effective board cannot lead an organization if it’s not kept in the loop by a self-serving management.
4. Risk Blindness by the Board & upper Management: They get their big pay stubs plus bonuses guaranteed! Why worry? Problems are ignored – which give these problems time to grow and to fester,
5. Unhealthy company PR by hiring manipulators: Poor company PR culture is another major culprit in terms of corporate failure. Businesses that place a hyper-intensive focus on driving stock prices up by hiring ignorant manipulators often foster cultures of double standards and deception or insulting posts directed towards any constructive opinion; seriously look at the 2 manipulators here!
6. Not enough working capital, negative operations cash, sinking in debt, growth of debt, high DE ratio and debt due in 2022
7. Systemic failures: This also presents a huge external barrier for corporates. After all, when government policy is stacked against the interests of a company or existing regulation facilitates reckless decision-making, those systematic failures pave the way for disaster.
8. Unpaid debt and debt maturity spells a threat of a hostile takeover by the debt holders or the banks and taking the business private which spells a disaster to shareholders.
9. Going crazy on failing business acquisitions, more borrowing. Such moves are exercised by successful, cash flow positive companies that are NOT buried in debt. Simply, when management cannot run their own business, how can they run someone else’s failing business?