Starting your own company isdaunting,but Colin Bloodworth hasa bit of advice

AFew Rules
For Success
In Businessh e average person will learn
from his or he r mistak es,
though a clever person will
also learn from the e rro rs ofothers. Whether you are .
running a multi-million dollar
conglomerate, a small bu siness or simply
m anaging your own personal financ es, itis wo rth taking th e time to stu dy why
oth ers have failed an d wh at lessons can beleamed from their experiences.

TBig corporate fai uresAn unprecedented string offailuresamong so me ofthe mos t establishedbrands in the world have colored the past
few years: the collapse of Lehman
Brothers in September 2008, for example,
was th e greatest failure in corporate
h istory.Other great American institutions
such as Bear Stearns, Merrill Lynch and .
AIG caved or need life support. Across th eAtlan tic, high street banks such as Halifax
and Bank ofScotland, Northern Rock andthe Royal Bank ofScotland all failed andh ave survi ved to th is da y th anks only togovernment intervention. Indonesia, too,saw a string ofbank failures d uri ng th e
Asian financial crisis of1997-98.
Why dkl they fail?
Basically, th ese institutions losttouchwith reality and got carri ed away without
taking into acco un t the consequences ofirrational lending. In the case of AIG, th ey
took on risk that they did no tfully
understand and could not cove r whenpush came to shove. In many cases, thoseat the helm ofth ese corporate behemoths
h ad little idea of what was happening in
the engine room.

Fraud
For countless years people have chea tedand defraude d customers and th ecompanies they work for. In 1995,onerogu e trader, Nick Leeson, was able tobring down centuries-old Barings Bank
with his unauthorized and unsupervisedtrading. Incredibly, seve ra l other banks,
includingSociete Generale and UBShavesince fallen victim to similar actions .

Keep pace with the times

to raise cash. An air line may own a fleet of
sparkling new je ts, but if it h as no cas h topay its fligh t crew or pay for fuel, it is outof business. .
.
On an individu al level, thousands ofhomeown ers in th e United States andelsew here were forced to aban don theirhomes be cause they fell behin d on th eir
mortgage payments . If th ey had kept adequate cash reserves, th ey would have bettel' weathered the storm,

pace with technology and consumer demands can mean ashort life for those at tile top.
Bare ly five years ago, BlackBerry and Nokia were at the
top of th e mobile peck ing order. Now,
they are fallin g stars n eeding to quickly
come up with innovative prod ucts torevive th eir fortunes or ris k d isappearing in to oblivion.
If you are in business, do yourresearch : find out the latest trends. Don 't
assume what you can sell today will sell
tomorrow.
On an individual bas is, the sam e
applies. Peopl e need to constan tly upd ate
th eir skills and be prepared if necessary toretrain and change careers se veral times.
Wh ere investments are con cerned, weneed to review our strategies regu larly toensure they are still relevant in an everchanging world .

Howclo we stay In business?
Though it is always a9 halle nge to stay inbu sin ess since failur e rates are high,success is very rewardi ng. Here are a few
basic pri nciples to follow:• Main tai n health y cash reserves at all
times• Don't over-extend any borrow ing• Don't lose sight of w ha t is going on in
the "engine room"• Monitor changes in co nsumer
behavior• Be ready to adapt qu ickly to ch an gingcircumstances• Have adequate insurance against all
possibl e calamities• Don't venture into fields vou don' t
fully understand .
• Don 't put everything intoth e business; have a good ex itstrategy
What if you still fail? Don 't
mull over it; leam from th e
experience and try again or try
som eth ing different Sometim es you first need to fail inorder to succeed.

T he lessons for small businesses andindividuals? Keep watch over assets andlook ou t for anything out ofthe
To surv ive Inordinary.

business, onemust be readyto ada qui ckly
To survive in business, one
to changing
must be ready to adapt qui ckly
. conditions andto chan gingconditions andmarkets. It . notmarkets. It is no t tile biggest
the biggest who
who survive - it's those whosurvive - it's
can adjust
For example, in the field of those who canadjust.
telecommunications, keeping

Alwaysma°nta nllquidlty
A business may be very successful, bu t ifi t
does not watch its cash position, it may
no t survi ve. The financi al me ltdown of2008 resulted from a d rying up of .
liquidity which caused asset valu es to fallas ins titutions sold eve rything they co uldColin Bloodworth. director of PPI
Indonesia.has spent over 20 years
in Indonesia.Ifyou have any
questions on this or a related
subject you can contact the writerat indonesia@ppi·advisory.com.