Business Solutions : Failing Business + Unable to pay monthly salary

Business Solutions : Failing Business + Unable to pay monthly salary http://makingadvertisingbusiness.blogspot.com

Problem 1:   Your Advertising Company is loosing to competitors due to mark-up  difference. Other Company can offer much lower price than your Company. Result =  Private/commercial projects and falling almost zero, Company is only earning on Government projects yearly and the salary of employees are always delayed for 3 to 4 months.

Solution:

           In this case it is very difficult to compete to other Companies which could offer lower prices because maybe they have much more lower operational cost than your company. 

                The best thing to do is re-evaluating your Company's capability, your Company's strength and weaknesses. 

Such as:

1: Can you survive without private/commercial  projects?

     

2: Can you pay the monthly salary of your workers if you will be depending on a yearly income?

     

3: Do you think by not adjusting your prices, you business can last for more years?

  

4. Which is more important to you as a business-manager/owner? To gain more by adding more mark-up or not accepting the project at all because of lower mark-up in other words doing nothing to earn and just wait for a nice project  profit margin?

Personal opinion:

     More often in a competitive world of business, more and more businesses go bankrupt and failed. Managers failure to device a strategy to fight back, or either he don't care about the business future or he is too lazy to work harder, and just wait for salary every month.

        

 If I will be that manager I will consider the current status of the Company prior to creating a solution.

Current status:

1. I am earning more in Government projects, the only problem is, the yearly return of investment or payment coming from the Government.

2. If in my commercial projects is loosing because of 50 to 100% marked-up compared to my competitor who is only adding a 30% to 35% marked-up plus incentives.

Analysis and suggested solution of the current situation:

- It is very evident that most likely, I cannot afford to earn for Company's operational expenses if I do nothing, if I do not accept projects. Weighing things and sacrificing some of your earning to save your company from falling is better than nothing. Afterall, accepting projects with lower profit on one product and being able to pay salaries plus you can do the Government projects at the same time. With all expenses paid but with only a 10 to 15% profit on your commercial projects and other hand you are getting sufficient profit on your Government projects, I think I would rather risk it at 10% + sufficient earning in the Government projects rather than doing the most unlikely decision of a careless manager who doesn't care if the company is earning or not.

- In a more stronger approach, you are offering a 10% profit to get back and fight back your loosing reputation and earnings = more sales and regain you status and popularity in the business + sufficient profit from government projects. 

   This solution may seemed harsh and being inconsiderate to other competitor but what else can you do? It is the reality in the business world, your competitors are killing your business. Don't you worry,  you may adjust you marked-up later-on as the situation improves.