10 January 2014 483 words, 2 min. read

Which perspectives for firms’ bankruptcies in 2014

By Pierre-Nicolas Schwab PhD in marketing, director of IntoTheMinds
More than 11000 firms went bankrupt in Belgium in 2013. Will 2014 be as bad as 2013 ?   Bankruptcies all-time high in Belgium 11052 bankruptcies and 27912 jobs lost: those are the sad figures of bankruptcies in Belgium for […]

More than 11000 firms went bankrupt in Belgium in 2013. Will 2014 be as bad as 2013 ?

 

Bankruptcies all-time high in Belgium

11052 bankruptcies and 27912 jobs lost: those are the sad figures of bankruptcies in Belgium for the year 2013. It’s unfortunately an all-time record. Whereas startups still get affected by bankruptcy in their first years (read our post on the truth about startup failures), the Brussels Chamber of Commerce (BECI) also sees more mature firms in difficulties.

As we explained already, the reasons for bankruptcy are manifold. Although there is no one-size-fits-all solution to it, it has been proved that market research is a good way to avoid failure.

 

2014 should be better, except in Europe

Euler Hermes has become the reference in terms of bankruptcy previsions. They published their latest report  on Dec 13th 2013 and foresee, on average, a 1% drop of bankruptcies at the global level.

The situation is however contrasted. Whereas Germany should experience a 6% drop (probably linked to the recovery of its industry) like USA, a small number of countries will still contribute to worsen the global situation. Belgium is unfortunately one of them, along with Greece, Spain, Luxembourg and China.

According to Euler Hermes, Belgium will experience a further increase of 4% in the number of bankruptcies. In 2014, we may therefore expect some 11500 bankruptcies.

Advice for your business strategy

We’ve accompanied a lot of companies over the years (they are all still alive) and one thing is clear : the initial plan, the first marketing strategy in particular, had to be changed. I’ve seen a few entrepreneurs failing miserably because they refused to see the reality of the market. Not only didn’t survey the market before starting their venture but they kept thinking that the market would change and would eventually adopt their product or services.

Whereas this may sometimes be the case (but it’s purely a matter of luck), the behavior of such entrepreneurs reminds me of casino addicts who can’t stop playing and think their luck will come back.

I’m saying it once again: don’t get in love with your own idea. It may seem wise but you’d better discuss it with relatives and experts. Stop thinking that others will “steal” your idea if you discuss it with them. It’s unlikely to happen.

Talk about it with as many persons as you can (in the end it’s like doing a mini market survey) and if it still looks as wise as in the start, invest time and money to really understand what the market looks like. There are dozens of tools (some of them are free) that can be used to research your future market. Read and re-read the series of 3 posts we dedicated to market research secrets in 2013: it will certainly help you get the fundamentals right and correct the most obvious mistakes of your business plan.

 

 



Posted in Entrepreneurship, Marketing.

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