A company files for bankruptcy when it becomes insolvent and indebted. When a company no longer has enough money to meet her basic obligations for day to day operations and productivity, it is bankrupt.
Becoming insolvent most times does not happen suddenly, it grows gradually. When a company keeps growing in liabilities, yet can’t generate enough revenue to mitigate these liabilities, it will eventually go bankrupt.
Many times, these liabilities are not deliberately grown, they grow based on inaccurate speculations, expectations, anticipations and sometimes sudden external developments beyond the control of the enterprise.
A sudden hike in the cost of services and materials required to run the business, for example, could lead to bankruptcy, a sudden arrival of an alternative and superior product in the marketplace can lead to bankruptcy, policy changes can lead to bankruptcy, but in my opinion, management inefficiencies and lack of foresight is the number one cause of bankruptcy.
Businesses become insolvent and they shut down because the managers can’t see, read and predict the future correctly. Sometimes they can, but their lack of will to change, to cut down, to acquire up to date capacities and tools, and take painful but important decisions lead to bankruptcy. Sometimes immediate pleasures, instant gratification, greed, vile ambition and ineptitude of leaders lead to bankruptcy.
Businesses don’t just fail, they fail for a major reason; the wastage of revenue or the inability to generate enough revenue to meet material and operational costs of the business. For Audio Version Click here
As individuals, many times we analyze very correctly the negative and bad behaviors and decisions of business leaders that ruined a business. We speak of them as though they were inept, unintelligent or cynical. We mostly sound like, if it were us in that position we would handle things better, but this morning I just want you to take a look at your life; as the manager of your own life, how well are you performing?
Are you generating enough revenue to keep your life running smoothly and progressively? How much are you making today, how much are you wasting today? How much would you be making tomorrow, how much would you be making next year, how much would you be making in five years? How fast are your liabilities growing?
Perhaps the same way you’ve probably not paid much attention to this, is the same way business leaders ignore as well, thinking and hoping things will just naturally work itself out for the enterprise until sadly, they go bankrupt.
Many of us today are sure able to generate a certain amount of money just to get by, but with any form of disruption in the employment, business or financial environment, we become bankrupt in life.
You see, it is a natural thing that as you age your financial needs will be growing steadily. Your bills keep rising as your family keeps growing, advancing and processing. The cost of feeding, the cost of clothing, the cost of tuition, the cost of transportation, health care, occasions, events, socializing, personal dreams and ambition will keep growing.
These are not developments that occur suddenly, you know they will happen sometime in the future. You know that baby will grow and one day go to school and you’ll keep paying school fees for about 20 years or more. If you have more than one child, you know the same will apply to all your children.
You know as these children grow they will eat more, keep changing clothes and will need exposure, entertainment, healthcare and proper nurture. You know you’ll need a car or two at least, these cars every four to five years will become old and need replacement. You’ll one day need a bigger apartment or your very own apartment. You will spend on your health and those of your household regularly, all these to mention but a few are factors that will require so much revenue inflow as the days go by.
If you permit me to expand this, the world over, inflation is a natural thing. The process where the cost of goods and services keep rising without declining is natural and continuous. The inflation rate in Nigeria today is at double-digit. Cost of most goods and services are doubling, is your own revenue doubling? If not, what are you doing about it?
New ways of thinking, new ways of doing things, new technologies, know-how and capacities are emerging daily, are you keeping up with the changing trends? How up to date are you? Or your abilities and competencies are like 10 to 15 years behind time? Powerpoint, excel, Microsoft word, Corel draw, latest windows, new operating systems, artificial intelligence, robotics, interactive and socializing platforms, virtual realities, satellites, drones. Google maps, electric cars, apps and gadgets where are you in and with all these trends? This is actually the future of all businesses and career? What’s the real cost of your personal upgrade?
Ladies and gentlemen, as you expand in your family life and become larger you’ll need more money. As you age and your physical energy is on the decline you will need more money. As the times are changing and the trends and flipping really fast you will need more money. So how do you keep growing this revenue to outgrow your costs so that you wouldn’t end up bankrupt as an individual?
Can your revenue flow be suddenly cut off by a termination of employment? Can your revenue flow be frustrated due to salaries being owed for months? Can your revenue flow be suddenly cut off due to a policy change that could affect your business?
What are you doing about your revenue inflow today, what are you doing about you revenue inflow in two years, in five years and ten years from today? Are you doing something; thinking, planning, developing and strategizing, or you’re doing nothing, just wishing, praying and hoping, or you expect a sudden intervention – miracle or magic that would just make everything work out without you lifting a finger.
When you see retirees in their seventies and eighties in long queues under the hot sun for several hours waiting to be paid just 250 Naira for the month and some of them die in the process, you may understand the need to plan for your consistent revenue growth today and not leave it to chance till it’s too late. Your future will not take care of itself if you do not take care of it. Your revenue will not grow itself if you do not grow it.
Ladies and gentlemen, it is time to face your reality and stop hiding behind a finger with excuses and explanations even you know won’t help you. You can blame anyone or any institution, it will still not help your situation. Come on, it’s time to get up and take responsibility for your future and birth a great, rewarding peaceful and happy one for yourself. Expand your revenue source, learn something new; a skill, a business, an ability, a capacity. Learn the real ways of doing profitable business today. Identify the new needs of the world and of humanity and plug into it.
About 100 million Nigerians today are less than 25 years old, what do they want? What can you offer, what can you do for them, what can they pay you and reward you for?
You’ve registered a business name for many years yet have done nothing with it. You’ve acquired skills and competence in something yet wouldn’t practice.
You’re perhaps basking in the comfort of your good revenue today that could be cut off suddenly anytime.
How much is your revenue today, how reliable is it’s consistency in flow, what other streams of revenue do you have? What are you doing about multiple streams of income? For every business idea, investment idea, network marketing idea brought your way, you perhaps saw something wrong, something not right and something not trustworthy in them. Haven’t you heard about calculated risks? What then do you want to trust, who do you think you should trust?
Ladies and gentlemen, its time. Take care of your revenue, don’t let your family suffer in future, you also shouldn’t plan for suffering, wake up today and smell the coffee. It’s time to grow and expand your revenue, for now, and for a better future.
Ladies and gentlemen Frontiers Business Academy Abuja holds this Saturday 24th. This month we shall be teaching and discussing Customer attraction, retention and loyalty in Nigeria. To grow and sustain your business, you must grow and retain your great customers. How do customers think these days? How do you get them to release cash to you again and again? Come learn how this Saturday. Time is 10:00 am prompt. To join this academy on Saturday in Abuja simply call 0706 349 6599. See you on Saturday.