Tuesday, April 23, 2024

Handling cash poorly No. 1 cause of failure


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MOST SMALL BUSINESSES fail because of bad cash management.
And Robert “Bob” Holland Jr, managing partner and advisory board member of United States-based management consultancy Essex Lake Group, made the comment as he spoke to scores attending the third annual Leo Leacock Memorial Lecture – part of a week of activities held by the Barbados Small Business Association at the Errol Barrow Centre for Creative Imagination, Cave Hill Campus of the University of the West Indies, on Tuesday.
Holland told the audience that there were six primary reasons why small businesses failed. He stressed, however, that poor management of cash was perhaps the main reason for failure.
“Top of this list are things like the absence of a good plan. Second is the lack of business experience . . . insufficient capital, poor management of cash, and businesses that start up tend to stay with their ideas too long. And last but not least, they hold on to unproductive people for too long,” said Holland.
He said any entrepreneur who wanted to be successful should ask himself what might go wrong before it does. Holland said there were four “gold-plated rules” to help a small business survive.
“Learn from the experience of others. A lot of the successful entrepreneurs I know ask a lot of questions.
“The second golden rule is to surround yourself with people who are better than you.
“The third is to manage your cash . . . and my last golden rule is to be aware. If you can’t comprehend why you might fail, you probably are already failing,” he said.
“Every business owner should be asking himself ‘what is it that I am not doing well’, and if you don’t have the answer to it then you need to get some metrics around things like cash and employing the right people,” Holland added.
Meanwhile, he forecast that China would become the “largest market” in the world and advised his audience to “go for the market and not wait for it to come to you”.
“I don’t think it is being selfish, I think it is just being prudent. China is going to be the biggest economy in the world within this decade . . . the fastest growing with the largest consumer market.
“I think there is every opportunity to sell what you have on all the markets that are emerging. Maybe it is time to take a delegation of young entrepreneurs and spread them out in China,” Holland suggested. (MM)

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