What mistakes do the entrepreneurs make when they want to open a company: “A great business idea is not necessarily successful”
The failure rate in business in Romania is very close to that of the US: in the first year since its establishment, 20% of companies fail, in the first 5 years almost 50% of businesses are closed, and after 7 years, about 70% of companies fail.
20% of companies fail in business in the first year since its establishment. Photo shutterstock
The lack of a clear strategy, the processes that allow the delegation and financial control are drawing the local companies. For this reason, but also because it works only on a derivative, without a clear destination, the entrepreneurial affairs have 2-3 times lower revenues than they could, shows an analysis of the business consultant Florin Leuca, who offered business consultancy for over 100 companies in Romania, London and Vienna.
The failure rate in business in Romania is very close to that of the US, the most developed economy of the world. In the first year since its establishment, 20% of companies fail, in the first 5 years almost 50% of businesses are closed, and after 7 years, about 70% of companies fail.
“Most of the Romanian entrepreneurs still do business behind the ear. The lack of a clear strategy, the processes that allow the delegation and financial control remain major problems. Entrepreneurs without a well -defined vision and without a concrete development plan risk sabotaging their own businesses. Only 2 out of 10 Romanian entrepreneurs have solid entrepreneurial culture, which makes many businesses in the first years to stagger or even disappear. In fact, there is a lack of accuracy regarding the financial-accounting part. 8 out of 10 entrepreneurs do not keep a clear record of the costs they have from one month to another and in most cases they notice the cost -control of costs or cash flow problems when it is too late, when they are already going to insolvency. This means doing business behind the ear, but the positive part is that entrepreneurs are forced by context to take control in business, not to leave things to chance and to act strategically, with clearly defined objectives and actions. Thus, business can be developed exponentially, being able to grow 2-3 times in a year, provided that entrepreneurs solve chronic problems in their business.”Explains the business consultant Florin Leucă, who has contributed to the development of over 100 business in recent years.
What problems do entrepreneurial affairs in Romania have
Romanian affairs are facing a number of chronic problems that brake their growth or even bring their bankruptcy. For example, the initial investment is often underestimated by entrepreneurs. They do not have enough capital and fail to obtain capital when they exhaust their own resources.
“Also, the entrepreneurs do not make a well -developed business plan and do not know exactly where they want to go. Since they have no clear goals, they do not act to develop the business in a healthy way. No business aspect should be neglected, each business being an ecosystem in which each management function has its vital role. Some entrepreneurs do not improve their product or service, do not emphasize the quality and satisfaction of the customer. And the market feels this immediately and reacts. Other entrepreneurs neglect the process of recruiting, motivating and retention of employees, do not hire appropriate people to their organizational culture, who have the values needed to work there. The first step to stop making business after the ear is for entrepreneurs to rely on specialists, to hire smarter people than in certain areas to whom they can delegate tasks. In Romania, many entrepreneurs are caught in execution, are directly involved in all operations, do micromanagement, being captive in their own business, but this approach is not a healthy and successful growth“Adds the specialist Florin Leucă.
The success of a long -term business is not just in having a great business idea, but how well you manage to implement it. Efficiency through processes and delegation, strengthening the business on its essential elements and the ability to make decisions based on concrete market data gives the adaptability and resilience that make the difference. Entrepreneurs need to understand the importance of entrepreneurial culture and education – of the well -elaborate business strategy and a long -term vision, says the business consultant.
