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Entp 15,Seven Business Crisis
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Entp 15,Seven Business Crisis


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  • 1. Seven Business Crisis
  • 2. What is Business crisis?
    • Business crisis means creation of such a circumstances in the business which are not according to pre-determined standards.
    • These circumstances may results into the winding up of business, if not removed or solved.
  • 3. List of Business Crisis
      • Starting Crisis
      • Cash Crisis
      • Delegation Crisis
      • Leadership Crisis
      • Finance Crisis
      • Prosperity Crisis
      • Management Succession Crisis
  • 4. Starting Crisis: Causes
    • Lack of thorough study of market potential
    • Lack of all round managerial ability
    • Inadequate arrangements for keeping accounts
    • Underestimation of required capital
    • Ignorance of tax-liabilities
  • 5. How to beat Starting Crisis?
    • Selection of familiar project
    • Making realistic, not over-ambitious plans
    • Keeping up-to-date business information
    • Encourage participation of investors
    • Meeting with tax-consultants
    • Estimation of realistic capital investment
    • Taking care in selecting machinery
  • 6. Cash Crisis: Causes
    • Over investment in Fixed assets
    • Excessive attention to growth in sales and Profit
    • Unable to get bank finance
    • Expansion of business without proper planning
  • 7. How to beat Cash Crisis?
    • Preparation of Cash Budget
    • Understand difference between cash and profit
    • Monitoring on inventory and receivables
    • Appoint good accountant
    • Take advice of Banker and Financial Consultants
  • 8. Delegation Crisis: Causes
    • Inability to delegate responsibility
    • Inability to share the decision making
    • Negligence to organizational
    • pre-requisites
    • Psychological reasons
    • Lack of time
  • 9. How to beat Delegation Crisis?
    • Appointment of a really capable, competent and effective person in the company
    • Effective supervision on new person
    • Counseling from expert consultant
    • Giving high remuneration package
    • Amalgamation with other company
  • 10. Leadership Crisis: Causes
    • Single owner/partners unable to manage responsibilities of large firm
    • Failure to delegate authority and to develop a management team
    • Failure to adopt the managing style of an effective leader
  • 11. How to beat Leadership Crisis?
    • Be an effective leader
    • Build a team of mangers/leaders
    • Give them sufficient authority
    • Act like a leader than a supervisor
    • Constant evaluation of oneself
    • Concentrate on business strategy
    • Be a good and effective communicator
  • 12. Financial Crisis: Causes
    • Failure in choosing right source and combination of fund
    • Failure to go for a public issue
    • Over ambitious and unrealistic expansion plans using surplus fund
    • Psychological problems of loosing control
  • 13. How to beat Financial Crisis?
    • Proper delegation of financial power
    • Consult experts and bankers
    • Going for public issue as and when required
    • Detail evaluation of each source of capital
    • Obtain Govt. Assistance
    • Leasing option
  • 14. Prosperity Crisis: Causes
    • Satisfaction with current success
    • Failure in coping up with environmental changes
    • Decline of market share and profit
    • Over-confidence of an entrepreneur
    • Un-expected illness or death of entrepreneur
  • 15. How to beat Prosperity Crisis?
    • Always keeps your eyes and ears open
    • Do not relax even in prosperity
    • Be aggressive, not passive
    • Do not be overconfident
    • Entrepreneur always remember that
    • “ Success today is no guarantee of success tomorrow”
  • 16. Management Succession crisis
    • The crisis arises when founder of business dies, and it leads to following three problems:
    • Who will be the next?
    • Split in voting rights
    • Wining loyalty and trust
  • 17. Causes
    • Tax and legal Issues
    • Problems of control
    • Problem relating to valuation
    • Partnership and ownership rights
  • 18. How to beat it?
    • Have a clear-cut plan for succession
    • Advance action in selecting management successor
    • Must have one person with general management skill and few others with special skills
    • As a successor it is better to select “team” rather than a single person
  • 19. How to beat it?
    • Always invite competent person in BoD
    • Develop club of like minded people
    • Constant interaction with banker and investors and lawyer
    • Plan for preparation of will, and transfer of shares
    • Brief family about key elements of business