A good business doesn't fail no matter the situation of the economy

[LGD2Business]

I don't believe that. Even the biggest companies can find themselves in trouble during a crisis. It's important to adapt to change and keep up with the times, that's true. It's also important to have capital set aside for tough times. However none of these things may be enough to save you in the midst of a major crisis. I've seen major companies (very solid ones, said to be unshakable by many) that went under during a crisis. You can never know what the future holds. No matter how many precautions you take, it might not be enough.

Take Kodak and Nokia for example. There are many examples in my own country as well. We had big supermarket chains in the 90's that are no longer here. There are major companies that had to close because they couldn't compete with the bigger players in their industry. In wild capitalism, the strong always swallow up the weak.

[HelliumZ]

The economic situation plays a major role in the success of a business, but it does not mean that the business will be successful only if there is capital. When you start a business, there are many other catalysts that work, including your proper planning and establishing your business according to that plan. You have enough capital, but if you cannot establish your business in the right place, then despite having capital, the business may not be successful. Business success is mainly based on customer relationships, producing the right products and maintaining quality, selecting the right place, and if proper care cannot be provided at the field level, the business will fail.

[Natalim]

I beg to disagree. Even the good and excellent businesses still fail when there is bad economy. When their operational and financial operations break down, no business can avoid from failure.

However, a good business will surely recover and thrive after experiencing such failures. Unlike those poor businesses, recovery will be hard.

One thing is certain, all businesses are prone to failure when the economy is negatively bad.

[Churchillvv]

LASTLY: A bad economy doesn't kill a business, it just teste it, weak and unstructured business fails because they weren't prepared. A good business stays safe because it is useful, smart with it's savings, flexible and trusted by the people.

Perhaps in my opinion what you are describing is just a good business but also a good entrepreneur. Be sure to separate the business from the business person.
when you are talking about a good business you mention qualities like, the need for its customers, the value regardless of the economy, human necessities etc

When it comes to the business person (entrepreneur) then you have to look at structuring, savings, management, trust etc.

My point here is that they are two separate entities that should be discussed on its own. 

A business and the entrepreneur are one single entity, especially when it comes down to a small local business. If you look around on the street, you will realize that the entrepreneur is actually the business and if an owner makes a costly management mistake, then it affects the entire structure. Like a shop cannot in any way adjust its own prices of goods or save capital or talk to customers in a meaningful way, that can only be done by the business person and in a case of a harsh economic storm, if the business survives, then it is definitely due to the street smartness of the boss and his flexibility to adapt to the pressure.

Am sorry to say this but the internet is your friend (IYF) you can make a quick search and find out the difference between and entrepreneur and business, a business person and the business hence you will not have to come on here and say all you said above.

From a common point of view, the business is an independent variable that the entrepreneur or business owner depends on to be an entrepreneur. You can not intertwine them as they have differences which are way too complex for such combinations. I however think that you might be see it from a different perspective which I may not be able to view it from. Business can survive with a good entrepreneur regardless of economy but an entrepreneur will have to be good for his business to survive economic pressures. Good entrepreneurs strive through harsh seasons in the but a bad entrepreneur crashes the business as the economy crashes.

[coinrifft]

I beg to disagree. Even the good and excellent businesses still fail when there is bad economy. When their operational and financial operations break down, no business can avoid from failure.

However, a good business will surely recover and thrive after experiencing such failures. Unlike those poor businesses, recovery will be hard.

One thing is certain, all businesses are prone to failure when the economy is negatively bad.

Yes, I do agree. No business is immune to failure, even how good your business model if. There are things like competition that if you didn't adjust then you are going to lose in the end. We have seen this to Nokia and Blackberry before, when they disregard the challenge of Apple in the mid 2000.

Now, this two business is no longer in existence or even if they try to reinvent themselves, there are no coming back from their old glory. Another good example is the thriving online food industry during the pandemic. Some of them really took off as food delivery is the key that time. But not that it has open, some of those businesses died a natural death.

[Cgrexp]

I beg to disagree. Even the good and excellent businesses still fail when there is bad economy. When their operational and financial operations break down, no business can avoid from failure.

However, a good business will surely recover and thrive after experiencing such failures. Unlike those poor businesses, recovery will be hard.

One thing is certain, all businesses are prone to failure when the economy is negatively bad.

A good business can fail due to adverse economic conditions. The success of a business depends on market conditions, people's purchasing power, cash flow  and overall economic stability. Running a good business does not guarantee survival in adverse conditions. Although all businesses are at risk due to economic downturns not all organizations are equally likely to fail. It becomes difficult for organizations that cannot adapt to changing market conditions to deal with crises. Economic downturns create risks.  However  market conditions are not the only reason for failure. The ability and management skills of the entrepreneur also affect the success of the business.

[Pearl_20]

A good business can still experience some weaknesses even with the things you listed, a good Business can still fail if the owner doesn't have plan B to hold the business together if the business starts shaken, a good business can fail if the economy is extremely bad.

I don't think there's any business whether big or small that can't be affected in one way or the other if the economy is bad, as someone who is into business I know that a good business can survive bad economy longer than a bad or weak one, if there's high inflation, fuel price goes up, poor power supply a good business will still experience some struggling, price will go up, most of them will experience low sales and some customers can decide to stop coming if you don't have good customer service, and if you don't know how to manage your business well profit can even drop as well.

The good thing is that a good business manages money well, and can survive even during hard times, the customers you have will keep coming back especially if you have loyal customers that have built trust over time with you and there's always room for plan B if anything happens because a good business saves Money.

[Opiate32]

Not every business is completely protected from economic conditions even businesses selling essential goods when customers lose purchasing power. People may still need food or soap but they might buy smaller quantities or switch to cheaper alternatives. At the same time the business owner may be paying more for stock, transport and electricity.

Well this is why I think a good business is not necessarily the one that can never fail but rather one that understands its risks and know how to manage them. Good management can improve the chances of survival but it can not remove every risk.

[AprilioMP]

LASTLY: A bad economy doesn't kill a business, it just teste it, weak and unstructured business fails because they weren't prepared. A good business stays safe because it is useful, smart with it's savings, flexible and trusted by the people.

The point is that a strong business will always stand firm, unaffected by the local economy where it operates, because once the local economy recovers, that’s when you’ll see how rapidly it takes off again.
However, when the economy takes a turn for the worse, businesses that aren’t built on a solid foundation won’t be strong enough to survive, and it becomes very clear which businesses—and their owners—will fail during an economic downturn.
In my opinion, certain weaknesses can also impact the trajectory of a particular business.

[angrybirdy]

I beg to disagree. Even the good and excellent businesses still fail when there is bad economy. When their operational and financial operations break down, no business can avoid from failure.

However, a good business will surely recover and thrive after experiencing such failures. Unlike those poor businesses, recovery will be hard.

One thing is certain, all businesses are prone to failure when the economy is negatively bad.

Yes, I do agree. No business is immune to failure, even how good your business model if. There are things like competition that if you didn't adjust then you are going to lose in the end. We have seen this to Nokia and Blackberry before, when they disregard the challenge of Apple in the mid 2000.

Now, this two business is no longer in existence or even if they try to reinvent themselves, there are no coming back from their old glory. Another good example is the thriving online food industry during the pandemic. Some of them really took off as food delivery is the key that time. But not that it has open, some of those businesses died a natural death.

Everything is prone to failure and business downfall no matter how successful a business may be. we cant deny the fact that we really dont know what will happen in the next more years. We can make any predictions as an advance signal but we still cant identify the exact challenges and problems we may face along the way.

That is why we should never remain stagnant or become complacent in our businesses no matter how good it works. Instead, we should think ahead and identify areas for improvement, as well as explore alternative strategies that we may need to learn and adopt to prevent business failure and bankruptcy.

As many people say, “Change is inevitable.” We cannot stop change and evolution, but we can adapt to them and use them to our advantage, making our businesses more resilient, innovative, and sustainable.

[Solokan]

A good business will never fail regardless of economic conditions, but it's certainly not easy to build a business that can survive in a downturn. However, if someone implements a strategy like the one you described, there's a good chance the business will survive even in a downturn, because selling basic necessities certainly won't be a shortage of buyers

Saving during times of good business is certainly necessary, and it will help someone running a business by having reserve capital for business or company needs. However, in my opinion, sometimes when the economy declines, income will inevitably decrease, even if we sell goods that many people need. Of course, having income is still profitable rather than having nothing at all in an economic downturn. OP: I think this is a good topic, but one important thing in business is that we must be able to compete with other businesspeople or companies. In my opinion, in this case, we must be truly serious and must improve quality

[Comeacross]

Take your soap example. It needs ingredients or raw materials. What if some morons started a tariff war elsewhere and price of raw materials you need to import to manufacture the soaps went up and there was a shortage as well since the supply routes were destabilized too?
Then your soap business starts suffering. You'll soon have to cut corners, fire people, lower the product quality and maybe even shrink its size and raise the price simeltanously.
Now your business starts suffering massively.
While you're struggling, someone starts importing soaps from China and floods the market with dirt cheap soaps. Your already lowered your quality so these lower quality ones aren't really far from your product therefore they take over your market and now your suffering business is screwed!

Same thought that came my mind reading this thread. People are very quick to put the blame on business owners without looking at what's happening behind the scene. External circumstances affect the business immensely that's beyond management control which sometimes left them with no choice than reducing the quality and increase the price while some give up completely.

This reminds me of how fuel price jumped up when US/Israel jointly started a war against Iran that disrupted the global oil market. You can imagine how far Nigeria is geographically with this countries but we felt the impact here directly. Just a few weeks ago, the price of cement went up like crazy just because distribution was disrupted due to traffic congestion and bad roads. There was no official price increase from the manufacturer but the retail price skyrocketed. Things like this can hurt the business and it has absolutely nothing to do with the one managing the business.

[Royal Cap]

2)A good business saves money for rainy days. This is taken out from your profit and you save it separately in a place where you wouldn't touch it no matter what happens.

However I would say besides saving money, you also have to consider for how many months your savings will last you in terms of monthly rent expense. This analysis helps keep your business safe in case of any sudden reduction in sales.

A good business doesn't just build relationships, but they build trust.

Yeah, trust helps keep customers loyal, but along with maintaining good relations, you also have to ensure your products quality and reasonable price, In case your customer gets low salary, he will buy less even from reliable vendors. Hence, along with trust, sound finance makes the base of a successful venture.

[sergiorus]

I beg to disagree. Even the good and excellent businesses still fail when there is bad economy. When their operational and financial operations break down, no business can avoid from failure.

That's right, even good existing businesses fail. And new businesses are especially prone to failing, no matter how ''good'' they are.

However, a good business will surely recover and thrive after experiencing such failures. Unlike those poor businesses, recovery will be hard.

Not necessarily. Sometimes a bankruptcy is the only way. Being in debt is a normal state of a business, when economic conditions make it impossible to maintain liabilities (remember 2020?) bankruptcy is inevitable.

[Localhostspeed]

Not every business is completely protected from economic conditions even businesses selling essential goods when customers lose purchasing power. People may still need food or soap but they might buy smaller quantities or switch to cheaper alternatives. At the same time the business owner may be paying more for stock, transport and electricity.

Well this is why I think a good business is not necessarily the one that can never fail but rather one that understands its risks and know how to manage them. Good management can improve the chances of survival but it can not remove every risk.

If an economy is bad, most businesses don't survive it no matter how you adjust the business to fit the condition of the economy, you will come to a time when you are going to be exhausted or you might even be exhausted but the loss will wear out and stop the business. It's even easy to exit a business and channel your business to other things than let it die a natural death that you may not be able to get back your investment, it's not worth the wait.

Government kills businesses too and it's not directly, they do it in indirectly. In my country, when a person doesn't like that you control a particular business and they have the power, they can work as a government to make sure the business collapse. The richest man in my county which happened to be the richest in Africa makes government his friends so his business will not have hiccups, he knows very well how dangerous they are to the success of his business.

[Abdul Sami786]

I beg to disagree. Even the good and excellent businesses still fail when there is bad economy. When their operational and financial operations break down, no business can avoid from failure.

However, a good business will surely recover and thrive after experiencing such failures. Unlike those poor businesses, recovery will be hard.

One thing is certain, all businesses are prone to failure when the economy is negatively bad.

It is exactly the same as the best business faces difficulties.A strong and good business overcomes these difficulties due to its expertise while a weak business has  everything short and ends up failing due to a bad economy.I think there must be ways to overcome these difficulties that people often do by keeping their experiences in mind.For example if a bad economy is affecting your business badly you should keep extra cash available, reduce expenses so that even if the business does not bring in money it will not be difficult to survive. Give confidence to retain customers and create good products so that they will come to your shop again and do supply etc. in a good way so that your business does not suffer much due to the economy.A good business is not financially instead how does it face difficulties and how does it solve them.

[ndutndut]

Strong businesses usually can survive any economic situation because they start with a solid foundation and are adaptable in every way. If you focus on a business that provides basic necessities that's great because these are the businesses people always look for. So it can be said that selling everyday essential goods gives an advantage since the demand is relatively stable, allowing the business to adjust strategies without relying entirely on the economy being good.

But for sure there’s no business that is completely unaffected when facing tough economic situations. Obviously, weaknesses will occur like rising operational costs, weakened customer purchasing power or supply chain disruptions. But with good financial management and adequate reserves the chances of surviving are much higher. Still, success depends on being ready to face unexpected risks.

[Die_empty]

A good business will never fail regardless of economic conditions, but it's certainly not easy to build a business that can survive in a downturn. However, if someone implements a strategy like the one you described, there's a good chance the business will survive even in a downturn, because selling basic necessities certainly won't be a shortage of buyers

Do you think some of the businesses that fail are not well set up? This is not the case because there are some economic conditions that most businesses cannot survive.  So many businesses are leaving some African countries that have experienced coups because their policies are changing. Some of their areas of operation have been nationalized, causing them to go out of business. Maybe we should say that well-managed businesses will survive economic challenges better than those that are not well organized.

[r_victory]

Of course, there are exceptions, and some companies can't withstand the shock, but, in general, the OP's thinking is correct.

I know century-old companies that have weathered currency changes, government and policy transitions, and wars and remain strong or even stronger. Solid companies are rarely shaken by the economy or are able to adapt quickly to any new scenario that arises.

[Emitdama]

Not every business is completely protected from economic conditions even businesses selling essential goods when customers lose purchasing power. People may still need food or soap but they might buy smaller quantities or switch to cheaper alternatives. At the same time the business owner may be paying more for stock, transport and electricity.

Well this is why I think a good business is not necessarily the one that can never fail but rather one that understands its risks and know how to manage them. Good management can improve the chances of survival but it can not remove every risk.

If an economy is bad, most businesses don't survive it no matter how you adjust the business to fit the condition of the economy, you will come to a time when you are going to be exhausted or you might even be exhausted but the loss will wear out and stop the business. It's even easy to exit a business and channel your business to other things than let it die a natural death that you may not be able to get back your investment, it's not worth the wait.

Government kills businesses too and it's not directly, they do it in indirectly. In my country, when a person doesn't like that you control a particular business and they have the power, they can work as a government to make sure the business collapse. The richest man in my county which happened to be the richest in Africa makes government his friends so his business will not have hiccups, he knows very well how dangerous they are to the success of his business.

Governments do play an importance role in the success of the business. Not every business owner has that good connections and they mostly end up struggling for life while on the other hand, someone having good political connections can get the insiders and can still manage to run that business smoothly. Political parties might also be making some side income from this gig. Not just in Africa, but even here in my nation, the richest person is a good friend with the government which makes it clear that political connections are just as important for a business.

These businesses can still maintain the profitability if they have a strong plan backing them. Bad economy does not necessarily mean that all business are simply going to shut down. There would still be a few businesses earning decent profits.