Poor Management Is the Main Cause of Business Bankruptcy
Thesis Statement
The main thing which I have come to know about the business bankruptcy from the study of Bradley and Cowdery developed the idea that poor financial management leads to bankruptcy they also create the difference between the failure of business and bankruptcy and the results are many business owners ignore to follow the advice from external sources (Bradley and Cowdery 2004).
Introduction
Any management who tries to run the business without a good investment and without a hard-working team is the main cause of failing organizations. It is very important to fill all the requirements of your business team to succeed in your goals. The management department needs to be very clear and sure with their business needs to achieve their goals, advantages, and disadvantages. In this matter owners needs to support their team with full responsibilities. It is also important to hire those employees who are skilled and experienced. The Bankruptcy is not only for a single person, but it can also damage the whole company and left bad effects on the economy of the country as well. In some countries like the United Kingdom and France, the bankruptcy is limited to individual and may cause insolvency in administration so the proper planning is needed for business. If the management is poor then definitely the working staff will be careless and reckless for their duties.
Poor Financial Management Leads To Bankruptcy
Poor financial management can be dangerous for the business and this happens when the credit facilities are used but after that, the user is unable to repay it. This is a negative point for any business and become very tough to manage and then the business categorized in bad terms that this business is wrong, bad, careless workers these all things reflect the negative impact on the economy of the country (Bradley and Don 1999). There are many factors which are responsible for the poor financial mismanagement like
· wrong distribution of responsibility
· Ignoring the records of bills and taxes
· Ignoring the responsibilities
· Fraud activities
· Financial strategy become cheaper
· No following rules and regulation
The financial and economic problems can be a big issue of mismanagement for shutting down your company. The financial management is very crucial for the economy of the country if the management fails then everything will be finished including the business will slow down and not easy to carry again.
Difference between Failure and Bankruptcy
All small businesses are not the reason of bankruptcy but the sole person if ask about the loans and start the setup in a specified period of time and then the bank will start lending the loans. The healthy key of the nation’s economy is to identify the small business. It is not important that the large huge business is always in profit due to poor management the large business also fails. The bankruptcy is another thing that the person is unable to pay the money back. It also becomes the cause of failure of many businesses due to poor management.
There are many reasons which are the main causes of business bankruptcy.
· Natural disasters
· Poor cash flow
· Poor location
· Poor management
· Poor record keeping
· Poor planning
· Lack of technology
· Trade credit
Fail To Use the Advices
The poor management of the business is also depending on the owner who neglects to seek advice from the external areas. They are not thinking out of the box just keep going on trading and running for more and more profit. The strong management has a good impact on any business. Many external sources and agencies are providing good direction and solutions for business problems (Coleman 2003).
Useful advice for boosting up the level of business is available from the marketing consultant and different government agencies which help people to grow their business faster.
Conclusion
There are many causes of bankruptcy like the poor planning is the big cause if the business is poorly planned so how can a new business stand up. Lack of financing, discipline, and experience is also the major causes (U.S CoC 2002). If anyone is going to start a new business he wants to manage first and to plan all activities at a regular time. Poor management is the main cause of business bankruptcy and not only for new business the planning important for every business. If an ongoing business, which is well known and popular if they don’t maintain their management or administration or don’t pay the debts then the problems will take place in the shape of business bankruptcy.
References:
B. Bradley III, Don & Cowdery, Chris. (2004). Small Business: Causes Of Bankruptcy.
Bradley III, Don B. (1999), “Poor Planning and Marketing Causes Small Business Bankruptcy,” Small Business Advancement National Center, University of Central Arkansas, http://www.sbaer.uca.edu/Research/1999/WDSI/99wds820.htm
Coleman, R. (2003), “The Most Common Reasons for Small Business Failure…And What to Watch Out for,” The Coleman Chronicles, Vol. 1 Issue 20, 4p. http://www.coleman.bc.ca/publications/chronicles.html
U.S. Chamber of Commerce (2002), “Bankruptcy Reform”, Capwiz.com, 1p. Retrieved 7/26/04 from http://capwiz.com/chamber/issues/votes/?votenum=478&chamber=H&congress=1072.
