Failures in Business

Having a failure is one of the worst faiths in business, also is the biggest impediment for thousands of people to keep up with their business because the sense of defeat they felt. To show you the meaning of business failures, I want to tell you a story that forms part of many of the business failure stories existing around.

One day a good friend commented me how wonderful would be the idea to start a business together, I agreed with him. So, I asked him to describe what all is about in his mind. He told me something about a machine built by him. The machine had this laser mechanism used to cut and engraving over any surface, like a printer. The main idea was to establish some kind of factory or store where we may provide the service to the public of laser cutting; even he showed me the budget for the project. Looking at the budget I came to the conclusion, we could not start the business, we were short of money, we both had the capital needed though, and the truth is that more capital was needed to achieve success. So I decided to decline his offer.

Despite the rejection, my friend decided to start the business by his own. Two weeks later I decided to visit him just to look at his progress, the result was amazing and devastating. The first impression was a place decorated by wood pieces of Christmas ornaments; it was not the best organized place, the machine was in sight of all publics and a girl was attending the place.

Just when he saw me arrive, rapidly he came to greet me. His words were quick and without any pause, he asked for my opinion about the business, I told him that all was looking fine and working. Without hesitation, he asked me: Would you like to be my partner? My first reaction was to put my hands onto my head and to change the expression my face with a sigh of disappointment and desperation, I answered in a way of asking a question: Why are you asking me to be your partner when you have all you wanted? The answer was simple: he needed money to keep his business on operation also he showed me a list of expenses to make and some payments to do because during the last two weeks he spent all his money.

Despite being my friend, I told him I was not able to help him, a good suggestion was to abandon the business before losing everything else and as a second option he could ask for a loan to the bank, he took the second option, I left him alone to his luck. Two weeks later he sent me an email telling me his business was in bankruptcy.

There are other hundreds of stories to share about failures in business, but, instead of listing the causes for business bankruptcies; I prefer to get into a conclusion, a moral from a good story. This story was real and happened a short time ago. Fortunately, my friend could find a job; he was hired by a huge company as a quality engineer, and more important this story did not end as many business failures ending in tragedy: people in jail, sued or even killed.

Our conclusion, we don’t need this happen to us in order to understand that we must follow the rules of engagement in the world of business.I remember the word, I told to my friend before starting everything: “Have you written the business plan?” of course he did not.No matter whether we have the best business idea on the world, there are steps to follow such as planning and organizing our resources.

Some important terms to define:

Business bankruptcy: According to Wikipedia “Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases, however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the insolvent individual or organization).”