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MGT418Week4FinancialManagementPresentation1.pptx
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Startup fails and Potential Resolutions
There are 5 potential reason a startup or existing business can fail. The top 3 are discussed in the following slides:
Top 3 reasons to fail
1. Marketing problems
2. Poor Management
3. Running short on cash and or capital
Marketing Problems
When a startup or existing business fails, they typically have run into a problem of being too little to late or no market for their products, and therefor usually triggers one of the following issues:
Potential Marketing Problems
A. Not compelling enough to have a value and cause the buyers to commit on making a purchase.
B. Timing in the market place is wrong for the product, and there’s not enough funding until the product catches on and finds a buyers market.
Poor Management Team/Structure
Here is a frequent problem that can cause a startup or existing business to fail is a weak management team or structure. If there is no proper management in place, then there will be mistakes made in multiple areas of the business. Causing an increase in expenses and or cash flow.
Top 3 Reasons of Poor Management
A. Weak strategies: building products or services no one wants to buy. And trying to validate those ideas before and during development.
B. Poor execution, this leads to issues with the product or service not getting built or developed on time, and hits the market being poorly implemented.
Top 3 Reasons of Poor Management
C. Theses products or services are typically ran by weak team members. Who have no management skills and make poor judgement and or decisions.
Running out of Cash and or capital
The last cause for concern is the most important for any startup business or existing business or service. This is the possibility of running short of cash, capital and or the flow of incoming profits. Listed below are a few examples of how to raise extra capital and cash and what it could and can mean to your business.
Examples of raising cash and or capital
A. Progress from seed valuation: this is to remove some major elements of risk
B. Product shipping: ship some early test samples to customers who have prepaid and are using the product and report their feedback.
C. Product Market: Business model is proven: make sure the cost of acquiring a customer is accept low and therefore, you will make a profit.
Top 5 steps to improving cash flow/capital management
A. Assess your current position
B. Track your performance
C. Create an Action Plan
D. Roll it out
E. Continue to improve
Importance of financing and handling working capital
There are 4 steps that will help cash flow or working capital for any business or service.
Importance of financing and handling working capital
A. Measuring cash flow: this is a 2 step process:
First start your cash flow projection by adding cash on hand and any that may be received.
Second making sure cash flow is accurate and detailed.
B. Improve receivables: by offering discounts, ask for deposits from customers, make sure to track all receivables invoiced out.
Importance of financing and handling working capital
Manage Payables: watch expenses carefully, examine all costs and find ways to cut or control expenses.
Work cited
https://www.entrepreneur.com article/66008
Smallbusiness.chroncom>Managing Employees>Manager
www.forentrepreneurs.com>business model
