People, as a rule, try to learn from mistakes, the only question is preferences: on their own or others. The new book by Lawrence Weinzimmer and Jim McConaughey, The Wisdom of Failure, gives you the opportunity to avoid the same rake that has already filled others with bumps.

Do not be afraid to admit the decision is unsuccessful and close the case

After significant financial and emotional investment in a project, it is quite difficult for a manager to admit that it is a failure. News Corp. spent $580 million on the purchase of MySpace in 2006, and also invested millions more in the social network. However, Facebook proved to be more successful, and MySpace eventually had to be sold for $34 million. Successful leaders are able to admit failure and leave in time.

Remember that no one needs “the healthiest cigarettes in the world”

Tobacco company R.J. Reynolds has spent more than $1 billion developing lower-nicotine Premier cigarettes. But the smokers rejected New Product due to bad taste and burning problems. As a result, “the healthiest cigarettes” were not needed by anyone. Smart executives don't think their taste is the same as the consumer's.

Don't be afraid to say "no" to easy money

The president of LA Gear increased sales of athletic shoes from $11 million to $820 million in four years using a variety of marketing methods. But the pursuit of profit ruined a promising company. Sale of shoes at discount prices in every store, including Wal-Mart, reduced the attractiveness and prestige of the brand. The head of LA Gear could not refuse "easy" money and paid dearly for it. The ability to say “no” to a seemingly attractive opportunity is one of the most important characteristics of a true leader.

Constantly work on new ideas so you don't have to use old ones

Richard Branson very often says yes, but only to the right projects. The British businessman always has a long list of new ideas waiting to be put into action and is oblivious to random offers. Decide for yourself what the company needs for successful development, and only then consider new proposals.

Resist the temptation and don't let competitors determine the company's strategy

American Coca-Cola did not notice how it joined in the business adventure provoked by Pepsi. In an attempt to give the “appropriate response” to the “New Generation Chooses Pepsi” campaign, Coca-Cola abandons the classic formula and creates a new drink, New Coke, which turned out to be extremely unfortunate. The failed soda was the biggest business mistake of all time.

Do not forget about the main product that is popular with customers and makes a profit

Netscape created the first and most popular Internet browser. But the company wanted to create something new and began to develop a new programming language, while ignoring the improvement of the browser. Founder Marc Andrien later called the strategy "a billion-dollar mistake."

Upgrade first what you are already doing well

Former Caterpillar Managing Director George Schaefer was well aware of the company's leading position in the market. Having several successful basic models, Caterpillar easily created updated, but no less popular models based on them. Before you look around, make sure that you have used the full potential of the business.

If you're great at doing the wrong thing, you won't succeed.

Pets.com invented the hugely popular image of a puppy doll on a finger, as well as the original website for the sale of pet products. However, the market was not ready for such a project. Americans prefer to buy everything necessary for four-legged pets, visiting a regular supermarket or a specialty store.

Don't just focus on efficiency

In an effort to make Zappos a more efficient company, Tony Shay outsourced logistics to another firm. However, this move backfired: shipments were delayed and customers were dissatisfied. As a result, Shay abandoned the innovation.

Don't let the latest technology get in the way

Pioneer Seed was a leader in corn seed production and had an army of loyal customer farmers. When biotechnology appeared on the market, the company decided to try some developments in parallel with traditional methods. But they didn't work together, resulting in Pioneer Seed losing a lot of money and getting dissatisfied customers.

Do not forget that too rigid leaders and unrealistic goals lead to disastrous results.

Terrible bosses are often praised for getting things done. However, former Sunbeam managing director Al Dunlap showed the dangers of this leadership style. His aggressive, and at times brutal, methods of working with people, as well as unrealistic goals, led to high-profile ethical scandals, resignations, loss of profits and the imminent dismissal of Dunlap.

Don't try to be everything - it will only confuse the consumer

Kmart was the first successful discount store chain in the United States. However, later the retailer tried to attract trading floors and wealthier buyers. In 2000, Wal-Mart began to focus on low prices, and Target began to focus on those who want to buy quality and fashionable goods. Kmart tried to do both and failed. As a result, the company had to declare bankruptcy in 2002.

The desire to avoid conflict makes people passive-aggressive.

The idea of ​​a conflict-free team is certainly very attractive. However, a "cloudless" environment can be dangerous and create hostility among colleagues. The absence of conflict means that mistakes and problems are not noticed or hidden, and people begin to do and say nasty things on the sly. Outwardly, everything may look harmonious, but, in fact, the team is incapacitated. The desire to please everyone can have serious financial consequences. The head of Malden Mills, Daniel Fersten, continued to pay wages to workers after the plant burned down completely. These actions had great public outcry, but the costs led to debt and subsequent bankruptcy.

Treating employees like children will lead them to step back and quietly watch the collapse.

Jill Barad became the first female head of Barbie thanks to the exceptional attention to detail that is very important for a product manager. However, this style is inappropriate in the position of managing director. Total control leads to passivity and disinterest of employees. As a result, Barad had to retire in 2000.

Focusing on your own image, rather than on the company, negatively affects both

Carly Florina came to Hewlett Packard as a real celebrity. Prior to that, she became famous for her ability to make important decisions, as well as frequent appearances on TV. IN new position she also tried to hold a series fundamental changes which were often poorly thought out and not agreed upon. The manager's keen desire to look spectacular and decisive had a negative effect on Hewlett Packard's results. Real leaders think first about the company and then about themselves.

Real examples of success and failure of real business sharks will help aspiring entrepreneurs to choose the right strategy and option for developing their business.

If you went to business school, you probably looked at examples of doing business in large companies. Real stories help students better understand successful and unsuccessful strategies. There are classic examples, including Apple's decision to change its name and Ryanair's victory over more powerful competitors.

1. Why Apple changed its name

Example: Apple Inc.

The main conclusion: sometimes it is impossible to defeat a competitor head-on without changing yourself.

What happened: Apple changed its name from Apple Computers to Apple Inc. in 2007. The move reflected a fundamental shift in priorities from iconic Macs to groundbreaking iPod and iPhone electronics, which now account for more than half of the US company's profits. The transformation of the company took place on time and extremely successfully.

2. How Lululemon maintained its reputation as a cult company

Example: management, culture and changes in Lululemon.

The main conclusion: instead of enmity, find an opportunity to unite the founders of the company.

What Happened: In mid-2008, the company's management passed from founder Denis Wilson to new president Christina Day. At the same time, Wilson expressed concern about the threat to the company's traditions and value in connection with the new leadership. Meanwhile, Day has inherited a host of problems, including poor results for chain cafes, a failed real estate strategy, and poor communication between company divisions. Using her experience and a new strategy, she did everything to expand the presence of Starbucks in the world. Moreover, she convinced the founders of the company to take management courses at Harvard and Stanford in order to better understand the need for change. For 4 years, the value of the company has grown from $350 million to $10.59 billion.

3. How Cisco Became Competitive Again

Example: Cisco Systems - human capital strategy development.

Key takeaway: In-house nurtured talent can help you get through tough times.

What happened: Cisco grew extremely fast during the hi-tech bubble, buying 70 firms during this time and doubling the number of employees of the corporation. After the bubble burst, Cisco had to change its development strategy and, instead of growing rapidly, focus on nurturing its own talents. For the most promising specialists, the company created the Cisco University. Within three years, the situation in the corporation changed dramatically, which allowed it to once again become a market leader.

4. How USA Today became profitable again

Case Study: Developing a New Strategy at USA Today

Key takeaway: Sometimes old leaders can't successfully lead a company in a new environment.

What happened: When the paper's circulation plummeted, USA Today president Tom Curly decided to integrate the company's various divisions, including websites, TV channels, and print media, and make better use of news content. At the same time, many of the old leaders in his team opposed the new strategy. As a result, Curly had to replace five of the seven senior managers.

5. How Dreyer survived the disaster

Case Study: Dreyer Ice Cream Shop

Key takeaway: Don't try to mislead employees.

What happened: Numerous problems, including high raw material costs, falling sales, and the end of a contract relationship with Ben & Jerry's, forced the company to undertake an urgent restructuring. During the meeting, managers personally met with each employee and discussed the upcoming action plan, as well as carefully listened to their advice. The strategy of trust, openness and faith in its own employees helped the company to become profitable again within two years.

6. How Microsoft decided to compete with Google

Example: Microsoft search engine

The main conclusion: there are no miracle methods, it is necessary to involve the entire company and all its resources.

What happened: 10 years after its founding, Google was able to become the leading search engine on the Internet. Microsoft was in third place, behind even Yahoo!. But the company mobilized and decided to radically change the situation by creating in 2009 the search engine Bing!, which was able to seriously challenge the market leader.

7. How Ryanair Beat Bigger Competitors

Example: Ryanair - the fight for the skies of Europe

Key takeaway: A resource-constrained company can mobilize and beat richer competitors.

What happened: In 1986, the two Ryan brothers announced the creation of a new company that would not be afraid to challenge industry giants such as British Airways and Aer Lingus on the London-Dublin route. By offering tickets at a record low prices, Ryanair was able to attract passengers who used to travel by train or ferry.

8. Ethical Issues perceived differently in the world

Example: Merck Sharp & Dohme Argentina, Inc.

Key takeaway: Ethical decisions are not always easy.

What happened: The new president of Merck's Argentine subsidiary was tasked with making the company modern and professional. After a while, he had an ethical dilemma. One of the candidates for a prestigious place in the trainee program was the son of a high-ranking official in the Argentine Ministry of Health. The president was made clear that if the student was taken into the company, then Merck drugs would be included in the state program distribution, which will certainly lead to an increase in sales. It was a real conflict between Mosker's desire to reform the company and the reality of doing business in a developing country.

9 Why Cirque du Soleil Decided to Forgo Comfort

Example: Cirque du Soleil – new building leads to new partnership

Key takeaway: Sometimes you have to let go of old growth partners.

What Happened: Cirque du Soleil had a mutually beneficial relationship with the MGM Mirage Casino. The casino has made significant investments in a purpose-built building for the unique circus performances. But emerging opportunities in Asia and the Middle East have prompted Cirque du Soleil President Daniel Lamarr to begin negotiations for new partnerships.

10 Why Airborne Express Lost The Competition

Example: Airborne Express

Main conclusion: narrow specialization can give an advantage, but only for a short time.

What Happened: Airborne Express, a small competitor to FedEx and UPS, was able to achieve significant results despite its size. The success is due to the long strike of UPS employees, which Airborne Express skillfully took advantage of. New company decided to become highly specialized, offering services at low prices only in big cities. However, this strategy was not successful, and the company was eventually acquired by DHL.

11. How Bad Communication Nearly Killed a Manager

Example: Eric Peterson

Key takeaway: sometimes it is difficult to overcome bureaucratic barriers

What Happened: A recent business school graduate was appointed director of a regional subsidiary of a major telephone company in the late 1980s. The Peterson-led firm began a massive mobile service development effort in Vermont and New Hampshire. However new project was behind schedule, and Peterson suggested that management reconsider the dates. But he was unable to contact his superiors quickly and in a timely manner, which eventually led to numerous problems.

12. How William Avery became a legend

Example: Crown Cork & Seal in 1989

Key Takeaway: Don’t Be Afraid to Think About Yourself

What Happened: William Avery became president of Crown in 1989, as new competitors entered the market and the metal division became increasingly unprofitable. The first thing Avery did was to start developing a long-term development strategy for the company, which included buying competitors and mastering the production of new packages. Success was not long in coming: today the company produces one in five cans/bottles for soft drinks worldwide.

13. Why Cisco chose to play big

Case Study: New Cisco Acquisitions

Key takeaway: Companies need different things at different times

What happened: Around 2006, Cisco decided to abandon its strategy of acquiring small, innovative startups, focusing only on rare acquisitions of big players. The old strategy was optimal against the backdrop of the rapid development of the Internet. But the situation on the market has changed, which means that new business models have become necessary.

14. How Lincoln Electric Succeeded with an Unusual Strategy

Example: Lincoln Electric Co.

Key Takeaway: Keep It Simple

What Happened: This is one of the classic examples American business. The largest manufacturer of arc welding products has not been unionized since 1975 and does not offer additional bonuses to employees. At the same time, Lincoln Electric guarantees every employee a lifetime job and the opportunity to become a shareholder of the company. The amount of salary directly depends on the level of profit of the company. Such unusual methods still do not prevent Lincoln Electric from remaining competitive and profitable company. Lincoln's strategy makes a strong case for the importance of motivating employees.

15. Why Nucor Steel Decided to Take a Risk

Example: Nucor at a crossroads

Key Takeaway: Investment determines new project size

What Happened: In 1986, Nucor president Kenes Iverson faced a tough decision whether or not to accept a new steel casting technology. The technology would allow the company to gain many benefits, including significant cost savings. But its implementation requires significant investments, and the technology has not yet been approved by regulatory authorities. As a result, Nucor nevertheless decided to build in 1989 the first plant using new technology. Since then, the company has remained the largest steelmaker in the United States.

However, you may be surprised to learn that you have to accept failure and fail often enough. Here are eight reasons why it's good for you:

1. Failure in business teaches you

“I didn't fail. I just found 10,000 ways that won't work." - Thomas Alva Edison.

People who make mistakes often learn faster. When you fail, you learn what works and what doesn't.

Venture capitalists have been known to invest in entrepreneurs who have experienced multiple business failures. They believe that the entrepreneur who has never experienced failure is the untested one.

Chriss Dunn (Founder of Skill Incubator) says: “My YouTube channel, ChrisDunnTV, has been stagnant for several years. After several videos failed to garner even 1,000 views during that time, I finally discovered the type of content that people found most valuable to themselves. Failure helped me learn about what people wanted to see and hear, and I achieved over two million views in less than a year."

2. You will discover what is missing

"Failure is a pointer to success" - Clive Staples Lewis.

Failure is simply a signal that something is missing. Failure shows you what you need to change in order to succeed. Through failure, you expose gaps in yourself, your strategies, your system, your business, and your team. You will learn about your weaknesses or shortcomings, which gives you an understanding of what needs to be changed or improved.

Through failure in business, you will find obstacles. After that, you can make a plan to enable you to jump over or bypass each of the barriers to your success.

“Like many entrepreneurs, I struggled to stay in shape because I convinced myself that I was too busy to eat healthy and work regularly. I have found that the causes of business failure lead to my inability to lose weight.” Chriss Dunn says

The reasons for failure are often those nasty little habits or conditions in your environment that guarantee failure before you even start. Once you identify and eliminate the causes of failure, this will open the highway for you to achieve your goals.

3. Failure in business makes you pause.

“In fact, there are times when you need to refuse because you are doing something by mistake. But if you are confident that what you are doing is right, then you should never give up.” - Elon Musk

Failure in business forces you to pause. This gives you time to analyze what you are doing and consider whether you should continue or should you give up. It forces you to consider the question, "How much do I really want this?"

As Stephen Covey says, "If the ladder isn't leaning against the right wall, every step we take just sends us to the wrong place faster."

Without time to think, you may end up wasting energy, energy, resources, and time on “the ladder against the wrong wall.”

4. Failure in business can be a sign of the beginning of success.

"Only those who risk going too far can possibly figure out how far to go." - Thomas Stearns Eliot.

Failure can be a sign of the beginning of success. Big failures are often followed by big achievements. You can't hope to achieve real success at anything by sticking to the small, being detached and trying to be safe.

Robert Kiyosaki shows this concept really well: “Winners are not afraid to lose, unlike losers. Failure is part of the success process. People who avoid failure also avoid success."

5. Failure in business often builds immunity to fear.

"There is only one thing that makes it impossible to achieve a dream - the fear of failure" - Paulo Coelho.

Fear of failure limits you. If you are afraid to fail, you are also afraid to take risks and grow fast. Fear of failure limits your growth. Frequent failures create some kind of immunity to the fear of failure. When you are not afraid of failure, you can accept any criticism and comments from your partners and clients.

As Aristotle put it, “There is only one way to avoid criticism: do nothing, say nothing, and be nothing.”

Chriss Dunn said, "When I was in my early 20s, I was in debt - my debt was $ 90,000 and I was almost without Money. After failing my first business, I learned that my worst fears weren't all that bad.

I had to make short-term sacrifices, but the fear soon faded and freed my mind, allowing me to build a seven-figure business over the next two years.”

6. Failure in business creates entrepreneurial traits.

“Winning is great, sure, but if you're really going to make it in life, the secret to learning is failure. Nobody is invincible all the time. If you can pick yourself up after a crushing defeat and go win again, someday you will be a champion.” - Wilma Rudolph.

Failure is essential to building valuable character traits for entrepreneurial success. Character traits such as perseverance, perseverance and flexibility are vital to any kind of long-term success. Your ability to move on despite setbacks where others fail will set you on the path to success.

7. Failure makes success more valuable.

"Success is the movement from failure to failure without loss of enthusiasm." - Winston Churchill.

People value success much more after they have experienced failure. When you can remember the humiliating moments of failure before you achieved success, you appreciate success much more. You also don't take success for granted because you know how difficult it was to achieve.

As Ellen DeGeneres said, "Failure gives you the right perspective on success."

8. Business failure creates a history of strength

“No person ever becomes interesting without failure. The more you fail, after which you recover and improve, the better you become as a person. Have you ever met a person who always had everything, he did everything at once with minimal effort and no failure? There are probably very few such people, or they do not exist at all. - Chris Hardwick.

Failure creates your strong personality story. Remember how Steve Jobs was fired from Apple, the company he founded, before going back there CEO a little over 10 years later? Failure makes you more tolerant and forgiving of other people. The success you have in spite of failure in business delights other people, creating value in your experience.

Your setbacks from which you have been able to bounce back and succeed can also motivate people around you (such as your employees, your investors, and your colleagues) to work side by side with you and help you.

There is another big benefit of having a few setbacks in business - it makes you humble. An entrepreneur who has never experienced failure will tend to be arrogant. Worse still, this arrogance can create the false belief that you are infallible and lead you to make devastating mistakes.

Business failures can hurt, but we must view them as a positive experience. We must err, and err often, because in this we also open up opportunities for our success.

As promised, I take out from the comments the history of the ruin of entrepreneurs. The brutal statistic says that most start-up businesses go bust - and my experience is that the statistic is completely correct. However, businessmen are usually stubborn and thick-skinned, having gone bankrupt once, they start again, and having gone bankrupt a second time, they take into account mistakes and start again at zero. The third or fourth attempt is usually successful.

The main business for 20 years is logistics, customs, foreign economic activity. By the way, it has also been transformed all the time - at first it was in-line cargo of the same type, container lots, now it is groupage cargo from anywhere in the world.

The first "left" experience - atelier for tailoring shirts by individual measurements. Pros - it was very interesting as we were one of the first. We bought fabrics in Italy from the Albini factory, then from the Turks, buttons (mother-of-pearl) first in Australia, then in China. A manager went to each client: he took measurements, chose the fabric, style, then sewing and embroidering the client's initials.

Pluses - it was very interesting, the production was located in the church on the cadet line of the VO right under the dome, there were many interesting customers. The process is one continuous creativity, we even came up with a name at random - Cagliari (the capital of Sardinia). Mistakes - did not calculate the limited demand, especially in the early 2000s. If you look at how most men look in Russia and, for example, in Italy even in 2017, everything will become clear.

It was a mistake a large number of partners. I had 4 of them - it's prohibitively many. The ideal option is two. There were also problems in management: I appeared at the production site once a month. Once discovered hazing and theft. I can talk for a long time about this business, as it left me good memories with zero profit.

Number 2. After a pause of 4-5 years, I again drifted into another fornication. The fact is that my main business is a great guide to many businesses - I have had dozens of different clients, from construction companies to sex shops. We sometimes find any goods in different parts of the world for our clients, conclude foreign trade contracts for them, deliver goods to the country, produce customs clearance and certify.

As you can imagine, we have seen the economics of many businesses, and we were constantly tempted to do something else. After analyzing the profitability, we saw that the biggest money is earned on women. That's how I became the exclusive distributor of two American brands cosmetics.

We bought goods in the USA, brought them, cleared customs and went to the Nevsky Berega exhibition. We built a creative crazy stand: we had a corner of California - a hip 1974 California T2 Volkswagen, beach umbrellas, sun loungers, an 80s surfer board, girls in T-shirts and appropriate music. Everyone liked the stand, both the owners of the exhibition and visitors, but it did not achieve its goal. The emphasis was on the show and the entertainment of the audience, not on the products we presented.

Then there were four more exhibitions in Moscow and St. Petersburg. Our mistake was choosing the wrong brand. We took a product of a high price category, high-quality a la natural, while at that time there were already about 100 hair brands on the market. Despite the fact that the consumer liked the products, the price was high, especially after the dollar exchange rate jumped. In order to raise the brand, you need to spend a lot of time, money and get used to the messy business of the beauty industry in Russia.

One of the most problematic moments is that you are forced to give the product for sale, and even if it is sold, it is very difficult to collect money from beauty salons and cosmetics stores - 90% of them keep records in squared notebooks.

Of the pluses, again, a lot of positive emotions from “money thrown away for entertainment”. I became to some extent my own for the participants in this closed business and now I provide them with services: that is, I have acquired new customers for my main business, and today they give me 50% of the turnover.

Summing up, advice - any business should first of all bring pleasure: from the process, from making a profit, from communicating with people, from experience. Ideally, if there are two of you - one partner should complement the other. I'm lucky I found one. Even if you have different interests and lifestyles, this is even good, but you must trust each other and share powers at the very beginning.

Remember, any monetary loss is an invaluable experience. Take risks, try different areas.

I'm thinking now, maybe it's time to open a sex shop? There is experience in delivery: from Hastlera itself, they somehow carried a whole container of toys to a client in Novosibirsk (it's cold there in winter - people warm up).

el_marka

My brother was a pawn shop manager. Opened it on shares with two partners. One far from perfect day, these partners came to the pawnshop with the police and presented an order to conduct a survey on operational information about illegal activities at this address.

They took out everything that was in the pawnshop. Three boxes of gold and other valuables, security notes, director's work notes, computers with accounting, all documents, a video recorder that filmed what was happening. 19 sheets of protocol. The next day, the police handed over the seized valuables to the mentioned partners. They "lost" these values.

As a result of the audit, a decision was made to refuse to initiate criminal proceedings against the brother due to the absence of corpus delicti. With regard to police officers, the case has already been dismissed three times for lack of corpus delicti.

The “partners” have not been prosecuted because the police do not see any evidence of their participation in the crime.

epic_slowpoke

All my attempts have always been broken by a lack of traffic (both Internet and live). For example, once we bought things from China and let's sell them. Since there was no money to rent a point, they sold it on the Internet.

It sold poorly. Few people visited the site and yf ads on Avito. Somehow, in two months they managed to recapture the money and even earn 2,000. After that, everything was turned off and they did not do it again.

The rest of my projects suffered the same fate. It is not enough to do something good - you need to tell the widest possible circle of interested people about it, and this is really difficult and very costly.

mari_v_polnoch

Incorrect calculations: the starting amount was 1.5 times higher, since a bunch of nuances were not taken into account when purchasing and paying rent. They also miscalculated the payback period. In general, working capital ran out very quickly and I had to take out a loan. Interest on credit funds was crazy, because the company was new and with low turnover. It ended with the fact that we barely paid off the debt, sold everything that was possible and we are learning math so that next time we don’t trust the numbers in everyone’s business plans.

saintjohnny

There was the first unsuccessful experience, it was the purchase of an allegedly working business. And since this business was the first, there was no experience. Therefore, we bought a deliberately unprofitable business and flew by.

The most important advice is to never buy "profitable" businesses, or buy only physical assets (real estate, equipment, goods) and not pay for an "idea", "passing place", "special dealer agreement", etc.

I worked for several years at the end of the last century (mid-90s) in a small private company that tried to develop and produce mini-automatic telephone exchanges in Moscow. Then it was a novelty, every businessman or entrepreneur wanted his own ATSku, the Soviet ones were condo and huge, and the imported ones were beautiful and expensive.

We (I was in the technical team there - the developer of several blocks) made a mini-ATS, and certified it in the Ministry of Communications (LONIIS - whoever knows in the know) and successfully sold it for more or less a couple of years. We managed to manufacture and sell several hundred pieces with a capacity of 20 to 200 numbers. Our price was very competitive, if not dumping - 4-6 times less per number than all kinds of Siemens and domestic "quanta" - domestic manufacturers with small-capacity automatic telephone exchanges were generally strained.

But then it crashed. Panasonic and LG broke into our market with the inexorable force - those who already led a conscious life in those years remember the most aggressive advertising campaign- "Panasonic-san" and other narrow-eyed commercials that were played on TV around the clock in every commercial break.

Then we learned what real dumping is. The interventionists lowered the price of their ATS for sales on the Russian market by 8-10 times from the selling prices of the same models in Europe and America. The monsters could afford to use the profits in other countries to sponsor the capture of the market by another one.

We "grunt our hearts" lowered the price of our mini-ATS to the minimum survival rate of the company. It turned out only 20-30% cheaper than Panasonic. But this did not help - any buyer would prefer to buy, roughly speaking, for 100 thousand rubles a device with the Panasonic logo instead of an unknown domestic manufacturer for 80 thousand.

After a year and a half of such existence, the company safely fell into poverty and self-liquidated. The interventionists, having captured the market and finally ruined domestic producers (large ones in the first place, we fell under the guise), began to slowly raise prices. Now the price of their ATS per telephone number is about 10-15 times higher (in dollars) than it was at the time of the intervention. Such a classic seizure of the market by dumping, right from the textbook. No bribery is also clearly not done.
And how, tell me, could you survive in such a situation?

I went bankrupt for the first time when, after the collapse of the USSR, I built a business using Japanese technology, an ear on clay feet, without money on a commodity loan, and on my reputation. The accountant made a tax mistake, and I was so busy growing the company that I didn't keep track.

The second time went broke when a lot construction works I did it for the budget on credit, and in 1998 the crisis began, the ruble depreciated greatly, I bought materials for foreign currency - I went bankrupt.

We did a technological scientific startup. They took a state grant for several million, opened a laboratory, went to conferences. The team included a human generator who started and steered it all, a couple of human scientists, a master with hands, a couple of sales people with connections, a couple of people on the hook. Everything you need for this kind of business.

The matter ended with the fact that the man-generator began to slowly raise his salary, and there was not enough money for the rest. The people on the hook left, then only one scientist remained, the salesman began to earn extra money on the hook, the master with his hands found another job, and the generator received more and more.

The grant money ran out, no result was achieved, but the generator repaired itself.

father_gorry

My three in the piggy bank

1. Web studio in the early 2000s in Novosibirsk. At first, everything went fine, almost every office building on Krasny Prospekt had our client. The prices are below average, its chic engine ... it was he who, apparently, ruined us. It became so perfect that we even stopped fighting for every revision on top of the TK, because it was easy and natural to make them. And clients suddenly began to want sites on common, then still buggy engines - PHPNuke, Mamba, Drupal, etc. All in all, regular customers began to fall off. Then, of course, they cursed, but did not return. The new ones were also wary of self-written technologies. I was faced with a choice - either move to a lower level and earn money, or change activities. Chose the second.

2. Whistles (Irish flutes). We studied the demand - it was. I set up production, distributed samples to familiar musicians - everyone was delighted with both the sound and the cost. The partner sent a few pieces to unknown people from an authoritative Internet hangout for Celtic music. And the local guys scolded the flute to smithereens. Verdict: "does not play." Without any construct and details - just "we don't like it". Maybe they just didn’t know how to play or were distinguished by aversion to everything Russian, but there were no other ways in the niche market and the project had to be closed. The moral is that you should be in contact with the focus group that represents effective demand, and work only for them.

3. Indestructible copter. A drone with a camera and other body kit, the same as the others, only it cannot be destroyed in an accident - even against stones, even into water, even against stones into water. Huge money savings and risk reduction. Here I don’t understand at all what’s the matter - but the project did not take off. Among the half-dozen focus groups that have been run, no one has so far been able to elicit interest. While I do not draw conclusions, the project froze, but did not quit.

alexbomboom

In short, I first bought the goods, then I just started to think about how and to whom I would sell it. The first injection was relatively small, about 200,000 rubles. Not to say that he went bankrupt, but he stuffed a little cones.

Time number. Gaming computer club. They took out a loan, agreed to rent a room, made some kind of repair, and made furniture with their own hands. We bought bulk computers, assembled them ourselves, set them up, installed games. Agreed with a local provider on a dedicated Internet line. They made a sign. And away we go... At first we worked with the partner ourselves day after day, then we could afford to hire admins. Raised their game servers, StarCraft, Diablo, LineAge, Contra. And storage servers with content. We signed an agreement with the provider and, under a sublicense, began to connect the residents of the house to the Internet. Joined the Russian eSports League. No one in 2001 could have imagined that high speed internet will come to every apartment and local servers and clubs will become almost no one needs. I left the business, my partner gave me my share in iron, which I sold myself. By the way, he is still doing the same thing, but the exhaust is only enough to cover expenses.

Number two. The three of us gathered for a glass of tea, two 1C nicknames and I, like a techie. And they decided to stir up an unprecedented business in our wilderness, a firm for integrated automation and service to businesses. There were no special problems, everyone had an accumulated customer base, certificates and other dregs. It was a blessed year 2005. They rented an office, hired a secretary. We attended to agreements with software companies, organized iron supply channels. We started to work. Things went smoothly: by 2007, the company had more than a dozen 1C programmers, 6 technicians, a couple of secretaries and an office manager. We even set up our own training and certification assistance. There were more than three dozen enterprises on service.

But then came 2008. Enterprises began to massively jump off contracts, switching to pay-by-call. We worked efficiently, so by inertia everything continued to work without maintenance and did not break. Contracts for ITS were not renegotiated. Procurement of new equipment and software stopped. People had to be reduced, we could not provide all the staff with work and, accordingly, pay. Then the rattling of one of the partners surfaced, who let fatty orders past the company into his pocket. Swearing and parting finally finished off the firm. Everyone again fled to the sides with their own clients.

Personal experience: a bank with working capital went bust. That's it, end of story. What places need to be strengthened so as not to be knocked down?

zorin_ivan_1982

Tried to start a software development business. It didn't grow. The reason is that I had to create my own software and sell it, and I tried to develop custom software. It doesn't fly.

Yuri Bystrov

They engaged in the production of polystyrene, or rather, they bought equipment and supposedly production technology. Before buying equipment, we did a market analysis, identified a steady demand for products, purchased equipment, launched advertising, certified a trial batch of products... good quality did not go.

The equipment manufacturer merged, shrugging, like it’s like that for you, for others everything works out (in fact, it was not so). As a result, the business, with all the investments in raw materials, in staff training, in the cost of premises, and in the salaries of staff, went down.

cat_shred

Moscow and the region, in chronological order. All examples are after 2005.

1) Pawnshop in the market. After the market closed, the pawnshop also closed “automatically”. They were no longer able to “raise” the business from scratch in a new place.

2) A company selling paint and varnish products. At the height of the season, the company and the management were accused of selling acetone to drug manufacturers, the warehouse was sealed under this case and seized computer network. A month later, the charges were dropped due to insufficiency, the warehouse and computers were returned. But the season was lost, the firm never recovered.

3) Firm for small wholesale trade in beer. As retailers were forced out by chains, the client base narrowed (it is easier for chains to bend the factory directly). After a period of slow fading, the business was closed, the director left for another area.

4) Pizzeria cheese factory. As milk production declined in the Moscow region, problems began with raw materials (to drive tanks from Krasnodar - not the same volumes).

5) Owner successful business decided to invest free money in the purchase of a restaurant. There was no personal experience and ideas, just maintaining quality and cleanliness in Moscow is not enough. For a while, the business worked by inertia from the old team, but eventually died out.

6) Brokerage firm. After the sudden death of the director, there was no worthy replacement. When all the money was spent, the company closed.

7) Construction company, finishing of apartments and offices. After the license was revoked, the bank's working capital "hung". The business managed to be kept, compensating for the losses by selling the owner's personal apartment and car.

In the early 1990s, he transported products (not to St. Petersburg) for small-scale wholesale trade and chose the wrong storage warehouse. Chased for cheapness and chose a warehouse far away. It didn't make sense for my customers, the food stalls, to come to me because of the discount I could give due to the cheapness of renting a warehouse. It was necessary to choose a warehouse on a promoted wholesale base.

I also noticed that all initial calculations in a new business (we are talking about a small business, where calculations are often done on the knee) can be safely doubled to get closer to the real figure. If the business scheme has already been tested, then the calculations are more or less accurate. It is very useful at the beginning of your "business career" to tune in to hard work and constant savings, instead of the expected explosive growth in consumption.

pasha_1980l

A financial advisory firm. The owner organized it at the very end of the 90s and very successfully caught the wave of economic recovery, when this market in 2000-2008. grew at a tremendous pace, essentially created from scratch.

As soon as the first money went in 2000-2001. he immediately pulled away from current affairs and all the time dreamed of finding a good manager who would do everything for him, as well as salespeople who would promote the business. And he himself will be engaged in the type of "strategy".

As a result, what happened was supposed to happen. Salesmen and managers were of two types: either unskilled or smart. The smart ones very quickly realized that it was much more profitable to open their own company, which they did, taking away customers.

At the same time, on the general wave of the market upturn, the company inertially existed (stagnated) until the beginning of 2009, when a decrease in the number of orders led to salary delays, since working capital was also withdrawn by this owner and there were absolutely no reserves. And these delays also stimulated the remnants of still loyal employees to seek their fortune on the side, taking with them the remnants of customers.

yra22yra

My friend has such a story, though not yet finished, while he is fighting: he created small business, things went well. Signed good contracts and urgent expansion was required. He invested in equipment, in the supply of raw materials, and then bam - there is not enough electricity capacity. A trifle question, I wrote an application for an increase in capacity at IDGCs by 630 kVA instead of the existing 160 kVA and waited for approval from there and new specifications began to read them with interest.

Having read up to the line 6,400,000 rubles (six million four hundred thousand rubles!) For 630 kVA, I threw out this piece of paper and is now looking for workarounds where you can connect without having any dealings with this unworthy organization. Udmurtia, Izhevsk, if anything.

alhambra13

My first business was in the 90s: I borrowed money and bought multi-colored harvester jackets in Krasnodar in the amount of 20 pieces for 2500 rubles. I gave the brothers a few pieces, they sold them to friends, earned 1,500 rubles from each jacket. Then he gave back the borrowed money and bought a few more jackets from the profit, sold it again, then, when the markets appeared, he rented a point in the market and connected all the brothers again.

We are prem in life together: if someone has an option to earn money, then he will definitely pull up the rest.

There should not be any friends and acquaintances in business, they are needed for buzz and pastime, and for business only family. My friends did not follow my path and started a business with acquaintances. As a result, they quarreled and barely covered their debts.

carbophos

Design and installation departments are often dumped from the multidisciplinary parent organization as a whole team.

There was a wonderful story when the first card turnstiles were introduced in the Moscow metro. After the delivery of the project, one of the directors with all the “metro builders” dumped from the contractor company and sat down on a contract for operation and support new system. For a circle, this was much more money than the project itself, and a new successful integrator grew up on them. And in many ways the same cash flow was not enough for the original integrator to survive the crisis of 1998;

The moral of the story is different. Firstly, the once great integrator had a mess with cash flow. The loss of one reliable payer therefore became critical, and not just a shamefully lost profit.

Secondly, the management simply did not realize the importance of the contract for support (and the clever director of the direction, of course, did not enlighten on this topic) - it lived mainly in the paradigm of selling projects as such. And the moral here is that a service is the best product in terms of cost, and value-added generators are highly mobile.

Thirdly, of course, the same “partner” factor, which is also the factor of a cunning hired top.

Anton Bogatyrev

There are such special people: arbitration managers and auditors are called. We can spend days and nights telling stories about a broken business. In general, there are not so many reasons:

1. Gross marketing mistakes, underestimation competitive environment and consumer properties of goods or services.

2. Debt load, both financial and commodity.

3. Underfunding - that is, just a shortage working capital caused by incorrect financial planning(valid for point 2 as well).

4. Negative balance sheet structure - accounts payable overtakes receivables, after which a cash gap, non-payments and bankruptcy inevitably follow. The reason for this is the non-use of accounting mechanisms directly prescribed in the laws, internal control and analysis.

5. Lack of risk management. Gross mistakes and negligence in the conduct of business and paperwork, gross neglect of all types of security, from fire to economic.

6. Corporate theft.

7. Corporate conflict.

8. External fraud, theft, robbery, raiding and other criminal schemes for the forced withdrawal of assets, "forced" mergers and acquisitions.

9. Administrative pressure and corruption burden. At the same time, it must be said that the last point is relevant only for over-margin markets. Corruption exists only where there are superprofits, that is, now it happens, but in a very narrow segment.

All the stories of our oppositionists about corruption are greatly exaggerated. By the way, the criminal component is now rapidly decreasing, it is almost always based on the participation of internal agents - partners of the businessmen themselves, or, alternatively, hired managers and leaders who have decided to deceive partners / owners a little.

In short, the main causes of the collapse are the cash gap and the subsequent default and bankruptcy. But their reasons are, first of all, the lack of planning, analysis, risk management and internal control, and, well, due diligence in doing business and paperwork.

If anyone wants to listen in more detail, then my colleagues and I give lectures at the St. Petersburg RS ISAS - the revision school of the Institute for the Preservation of Shareholder Property. For one thing, I highly recommend the multi-volume work of our institute “Register of Corporate Fraud”, which analyzes in detail by situation all the schemes we have identified over a third of a century.

silverlj

Several times I tried to launch non-standard products for the Russian market in the hope that the absence of competitors would bring fabulous profits - a marketing audit, subscription service for HR functionality, some others.

Almost everything went down the drain, bringing me only losses for advertising. Only one direction quickly shot, which after a couple of years became widely known, and now feeds entire companies of different bastards who stole my idea.

I can advise the following - if you have opened some kind of profitable direction, do not give mass advertising, and even more so shove your vanity away, send journalists to the stump who will offer to write an article about you. Keep everything under wraps.

If your product is really good and exclusive, only the end consumer should know about it, but not a bunch of people who want to quickly get rich on the same one.

Of course, this applies primarily to all kinds of consulting, which is easy to organize for almost any entrepreneur with minimal capital.

prioskolje

1. When renting a room, think about whether the landlord will be tempted by your business and turn you off at some point when everything is going well in order to earn extra money yourself. It happened to me with the production of cabinet furniture, when six months later I had to look for a new premises, the rent of which subsequently ate up all the small incomes.

2. A classic mistake - bringing your second business ( wholesale wallpaper on Russian markets from a warehouse in Ivanovo) to about zero and a small plus, I didn’t pull just my own residence in Moscow. I did not have a part-time job that was convenient for combining with business.

In 2005, he opened a point of sale for men's shirts, socks, underpants and all sorts of crap. Then another one. Then he handed over the second one to print photos, since the clothes didn’t go for something.
As a result, by the summer of 2008, he was driven into the red and closed both points.

I consider the reason for the closure to be the lack of my attention to business, caused by the fact that I myself worked at that time. It was necessary to delve better, and seriously engage in one thing, without spraying.

dr_denim_spb

My wife and I have a small business in common - a veterinary clinic in St. Petersburg. They started not so long ago, but so far they seem to have made one important mistake - they hired too many staff for direct veterinary work, and they themselves took up other work - getting the business on its feet (fire, SES, labor protection, Rospotrebnadzor, Tax, accounting, cash documents, licensing, advertising, reporting, and so on).

When three months passed, the mistake was realized and half of the staff was fired, leaving only the most intelligent. Themselves also stood "to the machine."

On the other hand, it may not have been a mistake - we won these first three months to set up the entire system from scratch to working condition. If we would immediately start working ourselves, we would save on staff, but I feel that the mess in the documents and all sorts of permits would still be the same - there would be no time to fix everything. A mess in documents and accounting often leads to large costs and problems with government agencies.

cergey_p

Pskov region, peasant farming, apiary. Two years in a row low-yielding honey.

juvisuel

1. Trying to build a video design studio with a cool level of work. They did not take into account the fact that delicious orders were distributed according to their own, connections to receive good projects did not have. They were crushed by crumbs. It was Belarus. They were afraid to raise prices so as not to scare away customers, so there was never a free turnover. For seven years they tried to put everything on their feet, lost the team four times. In 2008, the crisis finally knocked down.

2. The story is not over yet - three years ago I became very interested in creating unusual business cards. For me then it was as strange as it would be strange for a builder of skyscrapers to start sculpting pots. But it really drew me in. Decided it was a hobby. In general, there were no calculations, plans, just did as it was done. Invested in this money from the main work. I bought equipment, took assistants, people admired the work.

Again I fell for the same rake - I was afraid to raise prices, so after doing a bunch of just awesome work, I ended up in the minuses. As a result, the prices had to be raised fivefold. Old customers were scared for a few months. There was nothing to feed the team, they let them go on vacation. Now customers have started knocking at the new prices. It would seem that this is it, but I can not dare to start again. It seems that it didn’t burn out, but it’s as if it came from the war, and you don’t want to go back.

alex_kozlofsky

The story happened to my friends. A small network of stores with discs (dvd, audio, games) worked and expanded on credit money. At its peak, there were 5 stores in two cities. Everything quickly ended during the crisis of 2008, when sales fell sharply and there was nothing to pay salaries to sellers and loans. Main mistake was that there was no financial cushion in case of a drawdown in income. All the money earned was immediately spent, so at the first drop in sales, the business went bankrupt almost instantly.

Well, some simple advice:

1. Do not do business with friends and relatives.
2. Write a business plan and follow it.
3. All agreements between partners must be recorded in writing.
4. If you can do without partners, then do without them.
5. Cut to a minimum spending on yourself.
6. Keep accurate financial records.

I had an IT firm with 15 employees. I appointed a manager, and he destroyed everything, all the clients left. A curtain.

We tried a manufacturing business with three partners, but it never “wound up”. We had a guaranteed sales, but we were never able to arrange the supply of materials, the main of them was in short supply, as well as a suitable premises.

Conclusions: do not start investing until a complete business chain is built: suppliers, customers, premises, equipment are found. And it’s probably better to start alone, so as not to rely on the others. As an option: choose the main partner who makes decisions and responsible for the entire enterprise.

TekBoris

At the dawn of the Internet, there was a chic business where my buddies and I, in all seriousness, raised 30,000 bucks a year each. They laundered online casino, poker and booker bonuses. They just registered new accounts and scrolled through the bonus loot. It was a bit of a chore to do it, but the returns were fabulous. Especially in the early 2000s, when a good salary in Moscow was 500 dollars, and laundering bonuses brought 2-3 thousand.

It all ended with the fact that large companies increased their customer base with the help of bonuses and bonuses were practically canceled. But we warmed our hands well on such an attraction of generosity, I personally earned myself an apartment in Moscow in 4 years. And notice all this in between times, without interrupting your studies and the main place of work.

father_gorry

Friends projects.

1. Producing beginner musicians, label, CD publishing house. Started in 2004, burned out in about 2007 due to piracy. Sales were down, but scrobbler last.fm plays were up. Moral - protect the content.

2. Tailoring of curtains, 1998-2008 approx. The firm was unable to grow into a large enterprise, as the founders systematically hired managers who scammed them, cheated them and scored on customers. Moral - you can not save on the salary of employees.

3. Intelligent algorithm for composing and arranging music. At the time, this was a huge breakthrough. The founder and author of the technology was not only the smartest person, but also a talented organizer - he revived the company several times and produced a product of excellent quality and capabilities. Modern sequencers regularly implement bits and pieces of the features that were in the Onyx Arranger, and musicians willingly use them. The reason for the failure is not entirely clear to me. Perhaps it's a combination of a not very user-friendly interface and a focus on the machine, and not on the user, but this is unlikely, since programs with much less convenience and more complexity are now in use.

Not broke, but almost broke:

1. When he transferred the brigades to time payment instead of piecework. People just stupidly stopped working. Managed to get everything back.

2. Underestimation of costs. Little things can add up to so many costs that they completely gobble up profits. Constant monitoring of overhead costs is required. If you can not buy a chair for an employee - do not buy. Be sure to have a budget for the project and constantly monitor its implementation. If this is not done, for some reason it starts with contractors and employees: but you still need to buy - pay.

3. I ran into a tax - barely fought back. Chemistry with taxes. If I hadn’t chemized, I would have gone bankrupt right away - stupidly within a month.

alexvlad7

His own: a kid flew in from a person with whom he periodically collaborated and did not communicate idle - he seemed to use me unnoticed by the bulk of those around him, then he completely switched to drugs ... a kid - and disappeared for six months. And less than a month later, a government agency arrived with searches and seizures ... More than six months of nerves. It is very difficult to “get up” from scratch and without initial capital in some topics, and in this and so on, it is also a matter of reputation.

From a former partner: at the beginning of the 2000s, employees of a state agency “squeezed” the club from two partners in favor of a third.

Christmas tree

No matter how many businesses I started “with partners”, garbage always came out, and it doesn’t matter if there was a profit or not. Didn't live for more than a couple of years. The last couple solo - all the way through.

The same badass. As soon as there are partners, business is kirdyk. To a size in which one person can not cope until he has grown.

In the 90s, three very chic different businesses opened and closed one after the other. The reason is the deception of companions. Simple deception. There were very few means of control then. Invented, developed and implemented a specific network for the distribution of any services. People believed, but a year later, in almost one month, they stole everything, everyone they trusted. All capital has always been mine.

PS. This is the twenty-ninth article in the Reflections on Doing Business in Russia series. Previous articles in the series can be found here.

The goal of any business is to make a profit. Small failures happen periodically, but big players who know the market and the laws of financial movement are also familiar with the collapse. Luck is a capricious lady, it is impossible to predict her mood.

Companies and entrepreneurs often set ambitious goals for themselves - to create a fundamentally new product or service, to find new approach to conduct business or, conversely, to stick to proven traditions, despite the changes.

All this is done with the aim of making as much profit as possible, but some companies suffer losses instead. In 2010, the ONEXIM investment group announced the launch of a project to create an environmentally friendly "people's car". Its budget was 150 million euros.

According to the developers, industrial production cars was supposed to start in 2012 at a plant near St. Petersburg, the price of the car was announced at 360 thousand rubles. Then the launch date was pushed back to 2013. And finally, in February 2013, it became known that the first mass-produced yo-mobile could be released in March 2015. The estimated price of the car also rose to almost 500 thousand rubles.

Many experts consider statements about the beginning series production hybrid cars are unfeasible, since the E-Auto team is not experienced enough, and the project itself is low-budget. In 2011, ONEXIM admitted that it was looking for co-investors for the project. Sources estimated the necessary investments to support the project at 115 million euros.