Why Do Businesses Lose Their Value?



Why do businesses lose their value?

Nothing lasts forever. Or if you want, it depends on each one by “always”. The best example is this Bucharest accounting firm . Today we are on the wave, but tomorrow, where will we be?

Unfortunately, even a thriving business can gradually lose its market value. The exception is the situation when the owners, “characters” with a decisive role in capitalizing on the enterprise, through their abilities, experience and training, know when to take risks, but also when to make some decisive decisions.

In the absence of these competencies, even in the case of well-listed companies, maintaining and saving value becomes a real problem. And continuing with my own example, we can say that it would not make sense to strive for years to grow our accounting firm if we had not struggled to keep it as such and last but not least to protect it from devaluation.

 

What are the factors that can devalue SMEs?

A. Ingenuity of founders and their lack of information

A. Ingenuity of founders and their lack of information

When the foundations of a company are founded, the founders and then the associates have the power to act in a fair way. However, voluntarily or involuntarily, along the way, can contribute to the devaluation of society. By looking at other opportunities, when things start to “shuffle,” they can get out of society.

The exit procedure from a company such as LLC is possible if this is stated in the constitutive act, if the rest of the shareholders express their consent or in the situation where there is a court decision.

It is advisable to establish from the very beginning what the withdrawal action implies and what effects it has on the firm and the other associates. It is best to call on a representative to handle all the necessary steps for the operation of the company, from the establishment of companies to the preparation of payment states and tax returns.

B. Insufficient economic and marketing knowledge

B. Insufficient economic and marketing knowledge

Many people, if they decide to open a LLC or another form of organization of the enterprise, place first the enrichment overnight. But the primary goal should not refer to the potential for “rapid” expansion of bank accounts, but rather to cash flow.

The instrument, vital for analyzing financial statements, describes the liquidity and solvency of the firm. If, on the one hand, it provides economic agents with information on results and roles, on the other hand, it contributes to the planning of the list of future activities.

It is true that immediately after launch, current spending can be borne from your own budget. Sometimes they can be covered by different forms of public / private funding. But sooner or later, the holder (s) must find a stable and continuous way to generate profit.

C. Unqualified choice of associates and partners

C. Unqualified choice of associates and partners

The entrepreneur can be seen as a kind of leader, able to exert influence over a larger or more restricted group, made up of employees, collaborators, business partners and associates (as the case may be). Theoretically, this influence has a positive, stimulating impact.

Because the idea behind the business becomes and remains a success, it is essential that each member of the group share the same beliefs. Within the limits of responsibility and possibility, it must contribute to its growth and, if necessary, to sacrifice without hesitation.

But to be able to rely on the group’s help, all members, without exceptions, should be encouraged and rewarded. Something like this happens in the accounting firm on your website. Otherwise, you can not imagine that we could have resisted so long in a market where competition is growing from one year to another.

History is full of examples of companies that have known success precisely because of the compact groups that share the same ideals. But just as full of business is bankrupt, with destiny determined even by the lack of communication.

 

 

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