THE FINANCIAL ENVIRONMENT AND NEW BUSINESS MODELS
The financial crisis that has hit global markets is transferring to the real economy, forcing an increasing number of businesses to take their books to court. It is difficult to determine whether the crisis is simply accelerating the exit from the market of companies that have already been financially fragile for some time, or whether a more worrisome phenomenon is at work, one that is pushing out even more solid companies (which would enter the crisis not because fundamentals are at risk, but simply because there is a sudden lack of liquidity from customers and/or lenders).
Business management based on traditional models focuses attention on the investments needed to achieve the objectives of budget estimates or declarative business plans. These are models that take little account of the truly essential elements to keep track of: revenues, costs, profits , cash.
Statistics show that more than 70 percent of new companies in Italy close within the first 5 years due to lack of liquidity, with critical issues found in the following areas:
- market and competition
- Inadequate teams and lack of attention to managing financial balance
- little focus on cashflow and lack of funding
- Incorrect prices and excessive costs
- Wrong business model.
CONTRACTSUITE focuses attention on commitments and sustainability.
