Articles from Issue 116 of Amlak Journal Dr. Hussam Youssef Writes... Why do projects fail?

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Some entrepreneurs may believe that securing liquidity is the main reason for the success of their projects, but the reality is that businesses do not thrive on money alone;but rather through sound planning, wise management, and the implementation of a comprehensive set of administrative processes. On the other hand, entrepreneurs face challenges such as unrealistic profit projections. When entrepreneurs overestimate their revenue projections and build grand dreams on this basis, reality often falls short of their expectations, leaving them with profits that fall below their ambitions. Consequently, they are unable to meet their obligations, causing their businesses to falter. Instead, one should anticipate the lowest level of revenue and gradual growth for the project so that obligations to third parties do not exceed what is feasible; otherwise, why do large companies wait for years without realizing profits?

Among the major obstacles that can derail projects is launching without knowing the scale of supply and demand, the competitors, or determining the market share that must be achieved, as well as the extent to which the product suits consumers and their needs. Effective marketing strategies also play a fundamental role in boosting demand and increasing sales, and a major role falls on planning marketing and sales campaigns for products, as those who operate without planning are essentially planning for failure, It is also essential to calculate the marginal utility of the product and the appropriate production volume to avoid resorting to storage and the consequences and losses that may result. Furthermore, one must not overlook the importance of hiring qualified and specialized management staff. as competent management is a key factor in the project’s success or its collapse and demise.

There is another problem that may paralyze the project when some small producers are pushed into accepting payment terms that are unreasonably long, rendering the project unable to continue or develop due to a lack of necessary cash flow and high debt levels, which brings it back to square one, leaving it to either start over or shut down due to an inability to make payments in the short and long term, as well as an inability to cover recurring and monthly expenses, including rent, salaries, and other costs.