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4 Mistakes Companies Make and How to Avoid Them

Companies often fail due to forced errors or unclear thinking that leads them down the wrong path. Eventually, sales drop, and they’ve been unable to develop winning ideas to replace what’s no longer working.

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Mistakes Companies Make

Companies often fail due to forced errors or unclear thinking that leads them down the wrong path. Eventually, sales drop, and they’ve been unable to develop winning ideas to replace what’s no longer working.

In this article, we cover four mistakes that companies often make and what do to do instead.

1. Maintaining High Spending Expecting the Good Times to Never End

When the good times are rolling, the phone doesn’t stop ringing, and the Customer Service team can barely keep up; profits are high. As the founder, you think it will never end. This is the time when overspending inside the business (and outside of it too) runs rampant.

A new reception with marble flooring? Sure… All new high-spec laptops for all employees in the office? Of course! These things deplete the potential of retained earnings to weather times when they’re not so rosy.

Similarly, on a personal level, if you’re spending your salary and dividends from the company as fast as you’re taking them, your situation is not improving.

It’s best to reduce what you’re withdrawing from the company to keep spare cash in the business and, if necessary, take out a payday express loan alternative to shore up your liquid resources.

This way, you won’t need to make a massive draw on the company when you suddenly think that a holiday to Tahiti is worth doing.

Companies Mistakes How to Avoid

2. Not Using Flexible Labour Strategies to Reduce Total Running Costs

When you only have full-time employees, it’s an all or nothing approach to the labor market. This leaves few options other than to let people go when tough times do eventually hit.

Instead, embrace the flexible gig market by letting freelancers handle some of the essential tasks of the business. It will free up your team to focus on the more intensive aspects that they’re best positioned to manage.

Also, it’ll allow you to racket up or down the labor force without needing to let a quarter of the in-house team go during a significant downturn.

3. Failing to Be Open to New Ways of Doing Things

Businesses that are stuck in the mud don’t tend to last. Even if they’ve done business the same way for decades, failing to shift operations to modern methodologies is going to bite them in the end.

If that’s your business and mindset, then you need to shake it off! Your competitors are fully embracing all types of technologies and manufacturing opportunities to get ahead and stay ahead of you.

Automation, overhauled business models, and a host of other changes aren’t useful to ignore because they’re not going away…

4. Not Pivoting to New Business Ideas Fast Enough

When an old business is no longer working, there’s a reluctance to accept that. Even in the tech industry, software companies founded two decades ago that has done well to survive this far usually fail due to a lack of innovation from the top down.

It’s necessary to know when a particular product is near the end of its useful life. There’s a need to continually innovate and pivot to new, innovative software ideas to offer customers a solution that’ll be more competitive in the marketplace.

Businesses don’t run passively regardless of what the ideas of the day are. They take continual work and must evolve to continue to succeed. All business founders need to accept this reality to continue to be successful.

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Blockchain

Can Tokenization of Asset Bring More Investment From the Masses

Tokenization of assets isn’t a new phenomenon, but unlike the waves in the past STOs, this time, it might tip the balance in favour of decentralized finance.

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Ripple Cryptocurrency

In a new article, Coindesk has predicted that the Cryptocurrency’s DeFi sector is set to see a resurgence of Security Token Offerings (STOs) and has predicted “a sixfold increase in the total dollars raised using such funding methods over the next four years.”

Tokenization of assets isn’t a new phenomenon, but unlike the waves in the past STOs, this time, it might tip the balance in favour of decentralized finance. The article further predicted that “more private companies will bypass traditional initial public offerings (IPO) and instead use blockchain technology to digitize the capital-raising process.”

Although traditional capital markets and venture capital firms have ceded some prime money-making to DeFi, doing away with conventional IPOs might be a significant first step to democratizing venture financing.

Past the debacle of early blockchain ICOs, where the process by which a company ICOs was easy, but the lack of related regulations within the US and abroad around ICOs had led to many fraudulent crowd sales, illegal airdrops, and outright scams. This, in turn, had tarnished the reputation of blockchain-based projects. However, tokenizing assets and either fiat-backed or cryptocurrency backed by gold and silver have dramatically increased confidence in the crypto-asset markets.

The tokenization of assets that represents a real tradable asset, in reality, is quite similar to the process of securitization. An STO, with increasing frequency, is also used to describe a share in a company, ownership of a piece of real estate, or participation in an investment fund. These security tokens are also tradeable on secondary markets.

The new token economy offers to open up the investment world making it more transparent, efficient, and fair. The simplicity of tokenization will also help in reducing the friction surrounding the creation, purchase, and sale of securities.

In addition, it will bring several advantages for both buyers and sellers that will include:

1. Increased Liquidity of the Market:

The tokenization of illiquid assets in private hands, specifically art, real estate, and the likes, will significantly boost the market’s liquidity. Not only will it make it possible to liquidate the illiquid assets partially, but the ability to trade the security tokens in the secondary markets will also increase the trading activity bringing with it a broader base of traders and investors.

The “liquidity premium” alone makes it worthwhile to tokenize illiquid assets capturing more excellent value for the underlying assets.

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2. Making Transactions Faster and Cheaper:

The intelligent contracts attached with the tokens and their automated execution upon the meeting of coded terms in the smart contract will mean automation and lack of administration of much cheaper transactions. The buying and selling of the security tokens will require lesser intermediaries, faster deal execution and lower transactional fees.

3. Increased Transparency:

Since a security token is also essentially a smart contract, it can be embedded with the owner’s responsibility and rights. The fact that records on a blockchain are immutable searches, provenance and trading history would be a cinch. The entire chain of ownership rights, responsibility, and origin of the security token will be entirely transparent.

4. Greater Accessibility:

Most importantly, tokenization could open up the investment world to a large audience. The high liquidity, market movement, lower investment amounts, and shorter periods required to hold the token can make the token economy to the average investor. Like the ticket divides an illiquid asset, the tokens themselves are readily divisible into smaller and smaller fractions enabling even a small investor to participate in the token economy.

With automated workflows and cheaper and cheaper processing costs, and token administration, the minimum investment amounts will fall further. This will also increase liquidity allowing investors to hold the investments for shorter periods before cashing in. The trading is made even more robust due to secondary markets that operate 24/7.

5. Easier Asset Conversion:

With the DeFi market making the conversion of crypto assets into fiat currency more readily available, the same will become true for security tokens. By providing greater liquidity to an average investor that often shies away from investment into illiquid assets due to fear of the lengthy process of conversion of an illiquid asset into a liquid one.

If anything, the strong emergence and success of the DeFi market have shown us that making finance decentralized, transparent, and easily accessible will bring in more investors, not less, and lead to the market’s democratization.

In conclusion, the advent of a token economy will lead to a more transparent, liquid, accessible, and just financial and investment system that will serve more and more people via financial products and investment opportunities for all.

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