Wednesday 31st March 2021
You cannot manufacture, store, package, or deliver things online, so the eCommerce revolution has not affected most of the core offline industries in any negative way.
On the contrary, even online retailers need to buy from them, so it would be fair to state that the growth of eCommerce has only boosted core markets by giving them more business than ever before. Despite these advantages, though, new entrants in these sectors often fail, and established names end up going bankrupt without notice.
There could be so many reasons responsible for such failures, and it would be difficult to point out why a particular manufacturer had to shut shop without knowing what their specific situations and problems were.
Nevertheless, collecting information from former executives and employees of companies that did not make it, we have identified a series of crucial mistakes that can explain most manufacturer fails.
Inexperience
The rules of business are seldom as simple as random online posts make them out to be, but there are a few very straightforward and relatable rules that do apply.
One of them would be that you should be trying to manufacture something unless you have worked in the field yourself for a significant number of years.
Inexperience and business entrepreneurship are two incompatible terms, which new companies realise all too late, far too often. If you do not have any experience in the sector you are targeting, at least hire someone who does and provide them with the liberty they need.
Insurance Mistakes
There are many misconceptions about insurance, particularly when it comes to business insurance, but the best way to avoid costly insurance mistakes is to understand the market.
There are multiple subdivisions within commercial real estate and depending on what kind of property the business owns, the commercial property insurance premiums, and the specific coverages, will vary quite a lot. Most importantly though, you need to be extra cautious and particularly selective about the coverage terms in your policy.
As Quotezone points out, Commercial property insurance is not just there to insure the property, but it should and can include a lot more. Commercial property insurance policies can cover everything from the machinery and the manufacturing equipment to property owner’s liability, employer’s liability, and even company stocks! Pay a visit to their site to compare commercial property insurance policies from different providers.
Bull-Headed Leadership
A lot is said about the stubbornness of successful leaders, but not enough is said about the unsuccessful leaders who were so stubborn that they forgot their original mantras of success.
If a leader is steering the company in the same way that he/she always used to, despite there being evidence of the old strategy becoming counterproductive or outdated, the manufacturing business is doomed to fail. Examples of such bull-headed leaders and their failure to notice the changing market are everywhere and in every field. A few infamous and somewhat sad examples would be Nokia, Motorola, Polaroid, Kodak, Compaq, and General Motors (GM).
There are definitely other reasons for failure that have nothing to do with the company itself or its leadership decisions, but mostly the situation itself is to be blamed. Nevertheless, these three are often the main problems behind a manufacturer’s downfall or lack of success.
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