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Business Implications and Proposals for Further Research


Incurring business losses are a common business problem with various implications. While most businesses aim to increase performance and productivity, revenue generation plays a pivotal role in enhancing this. Shortage of funds for marketing and meeting expansion costs greatly hinders business development. If unresolved, the problem extends to the management and compromises the quality of the products and services.

Implications And Recommendations Of Business Losses

  • Reduced business operations

Companies getting losses from a reduced market share and low consumption spend improving their services while getting fewer outputs. It decreases operational work, which includes laying off employees and selling assets. The increased financial burden also leads to the closure of underperforming business outlets. The functional output will be low due to a lack of investments to create business opportunities. Consequently, the ability to get involved in foreign markets and explore new business opportunities are hampered (Butaney, 2017).

Instead, businesses should measure their performance by setting realistic goals to increase operations. It includes setting actionable plans and creating milestones to track the progress over a short period compared to an entire financial year. Keeping the latest trends is also vital in increasing business operations. Knowing the latest trends creates inventions of new systems that improve performance and use the latest technologies for maximum productivity. Streamlining processes such as using inventory management software helps boost productivity and increase profits, thereby improving operations (Gelderman et al., 2017).

  • Bankruptcy

Continuous business losses lead to bankruptcy. Although some businesses may avoid bankruptcy by selling their opportunities to competitors, this is always the final way out for most companies. It is common for underperforming businesses, and it may take time for a company to be declared bankrupt, depending on its size and management operations. Previous bankruptcy affects the possibility of opening a new business in future, and the shareholders are equally affected due to the lack of dividends and the ever-decreasing share prices (CAO & He, 2020).

Businesses ought to prioritize debt repayments such as unpaid tax bills. It is alternatively minimizing expenses such as using public rather than private transport and reducing unnecessary allowances. Renegotiation of payment plans with lenders such as financial institutions further prevents bankruptcy and reduces losses. It sold non-essential assets and maximized income streams (Gilliland et al., 2015). Creating a new business plan to provide strategic planning and rebranding may be essential to avoid bankruptcy and minimize losses.

  • Negative gross profit margins

A consistent reduction in profits leads to losses. It is due to declined sales and poor pricing to avoid bankruptcy and loss of assets. Hence, customers buy relatively lower prices than expected products (Butaney, 2017). Poor marketing also leads to negative profit margins, ultimately loss. Lack of using the latest and most effective marketing strategies, such as online promotions, may lead to low purchasing power. Eventually, businesses constantly lag behind the curve against their competitors, leading to losses.

The best recommendation for businesses will be to reduce the gross profit margins. Reducing utilities and labour costs is an effective way to help a business save up to 10% annually. It includes eliminating overtime payment and scheduling proper time for employees to work within a specific timeframe (Laudon, 2019). Using contract-based workers also reduces operational costs. For instance, jobs like software development and data entry are more cost-effective when using a contracted employee. Lowering prices using effective strategies like reducing occasional sales also reduces costs which may lead to debt by lowering the profit margins.

  • Loss of financial liquidity

Loss of financial liquidity denies the company or a business the ability to cover short-term liabilities on time. It may also lead to bankruptcy if uncontrollable at an early stage. Failure to detect financial liquidity leads to less profitability and failure to meet the financial goals of a business in a reasonable time. Hence, a business strategist must analyze every department and the losses to counterbalance liquidity and boost financial stability. In addition, liquidity risk should be low when enhancing cash flow forecasting, proper management of existing credit facilities and conscious financial analysis (CAO & He, 2020).

Further research required

  • Quantitative research

Using quantitative research with predictive questions helps to understand marketing trends to avoid business losses. Conducting surveys within and outside the organization creates an avenue for analyzing operational costs in a business setup. Besides being inexpensive, data surveys are among the most effective strategies, especially if a company or business has its tool (Zimmerman & Blythe, 2018). Surveys and responses about product consumption and the quality of services help reduce operational risks. For instance, reputation risk, which results in increased operational costs with low product consumption, indicates that a business may fall into bankruptcy.

This technique further provides new ways of creating comfortability and fulfilling consumer needs. It is also effective during the inception periods of new products in the marketplace. Therefore, it facilitates competitor analysis and restrategizing to meet the customer’s needs. For instance, collecting data from a sample size of about 100 clients may help to rate the quality of products and services on a scale of 0 to 100 (Laudon, 2019). It, in turn, provides a way of identifying service and product improvement areas.

The technique also extends to interviews with focus groups to gather qualitative and quantitative data. Eventually, an opportunity to get views from a general perspective point out the weakness and strengths of each service and product. Observing customers’ real-time interaction with the actual product provides insight into which features the business ought to pursue (Gilliland et al., 2015). It provides essential data to implement new ways and policies and make products to increase user efficiency. Survey data represent a large population, giving a generalized opinion that helps draw meaningful conclusions in the product marketability stages (Butaney, 2017). Consequently, anticipated business losses through increased operational costs are limited.

  • Descriptive research

Another research approach uses a descriptive research design by looking at the business’ performance from a theoretical point of view. This research further enhances marketing research to create new products or modify existing product features in the market. For instance, a business or company may consider asking themselves why customers prefer using a particular product to another. Similarly, knowing client preferences about getting services from a specific business than another one is significant in collecting data to help alleviate losses (Olexova & Chlebikova, 2021). Implementing observation techniques to collect data about small and large businesses helps track sales growth

For instance, highly favoured products and services will display a higher sales growth than their counterparts. Observation helps in testing consumer readiness for products in a new place. This method will facilitate the creation of better distribution channels while establishing a consumer base. Observing customers’ interaction with products tells more about brand awareness. Therefore, businesses will use alternative marketing techniques to avoid a negative profit margin, which eventually leads to losses and bankruptcy. Incorporating observation in descriptive research is relatively easy due to the small sample size. Businesses that observe consumer behaviour for a week are more likely to get more information about their products to improve or create new marketing strategies. Besides the ease of use, descriptive research provides qualitative and quantitative data for formulating a hypothesis. Therefore, it provides a holistic understanding of the research problem, deducing desired results (Gelderman et al., 2017).

Statistical data analysis such as the mean, mode, median and frequency helps monitor business activities and decision making. Such data helps determine financial liquidity and monitor trends over a specified period. Proper analysis of average expenses and consumption will predict the business trends, making it easy for startups to minimize costs and increase profits. Descriptive analytics incorporates historical data that gives a business an accurate picture, essential in providing insight into past performance. Such data is also necessary for predicting future trends, thus helping minimize liabilities leading to losses. Data mining and aggregation are good ways to predict patterns for most businesses (CAO & He, 2020). Understanding business descriptive research has various impacts helpful in making sound business decisions.

  • Experimental design

This method is cost-effective and more precise in helping a business avoid or minimize losses due to bankruptcy, reduced business operations, low-profit margins and financial liquidity. Unlike data mining, a business controls the introduction of certain stimuli to elicit responses in the marketplace. Responses elicit the question of research to help unfold the mystery of the problem. It helps in determining essential factors such as the type of product packaging, colour and not limited product availability (Laudon, 2019). The method is more effective for large companies with more customers but faces constant product offer changes.

The sample size entirely depends on the test characteristics and the target market. Although experimental design requires a large market sample for established companies, it is more reliable as the marketers feel the impact of the product on various consumers. It further prevents poor decision-making when selling products to customers. The management has adequate time to make adjustments to ensure proper sales and marketing using the available data. Eventually, the probability of losses is low while presenting a valuable insight to make profits. Depending on the data, the business helps reduce operational costs, such as transportation of the required products, after evaluating the average consumption rate (Butaney, 2017). Furthermore, business expansion through establishing various outlets depends on the available product data in various geographical regions.

Since experimental design aims to test various products and compare outcomes, businesses will likely make more profits by concentrating on the best-performing products in the marketplace. Getting customer responses to certain products increases conversions. Competing customer experience is high when brands recognize their customer’s needs and preferences. Therefore, Experimental design promotes better marketing strategies and a proper selection of products to display in the market.

  • Correlation research

Correlation and regression analysis provide meaningful insight into various metrics in business development. It helps to monitor key performance indicators and maximize the return on investment without compromising the quality of customer experience. A company uses correlation research to formulate new hypotheses, improve marketing performance and uncover potential losses (Zimmerman & Blythe, 2018). This method is compatible with naturalistic observations and surveys to investigate the product’s effectiveness to consumers. Although it uses quantitative research, it promotes the external validity of services.

For instance, surveys with a sample size of 300 customers are essential to get views about specific products to promote external validity in the marketplace. It provides an opportunity to make changes in the quality of services, improving customer satisfaction and enhancing the quality of experience for each product. A business using correlation research has high proactivity with its campaigns. As a result, monitoring and testing customer reactions give rise to new marketing tactics to better understand customer requirements (CAO & He, 2020).

Correlation research is effective as it covers previously unknown relationships. No data undergoes a manipulative process, and therefore it is reliable. The fact that it utilizes archival and naturalistic data helps 5o provide predictions of each product and analyze its outcome with continuous selling. The method effectively avoids losses through guided operational costs in a controllable manner (Olexova & Chlebikova, 2021). Any organization controls the expenditure to market the product using past and financial management trends, avoiding unnecessary expenses that lead to losses.

  • Exploratory research

Exploring an inexperienced is a valuable marketing strategy to improve business by minimizing losses. Instead of using statistically accurate data, a company’s decision to explore unknown causes of problems is significant for development. The advantage is using a small sample size while focusing on the likelihood of unexpected occurrences (Gelderman et al., 2017). This approach creates a readiness to face such outcomes by having extra funds to counteract the scenarios. For instance, an effect on the health of the consumer population affects business performance through reduced consumer purchasing power.

However, conducting exploratory research helps to promote growth during high productivity and low consumption. Unstructured interviews and observation methods are standard in exploring such problems (Gilliland et al., 2015). The findings from customers provide a source of poor selling and marketing strategies that a company or business can avoid to enhance its sticks to the practical and latest trends. Studying questions that have never previously gained popularity in the same industrial niche is essential in preparation for the eventuality that quickly leads to losses.


Implications and recommendations for business losses arise from high operational costs, bankruptcy, negative profit margins and loss of financial liquidity. However, research helps minimize or avoid losses after identifying the problem. Research is suitable for determining the customer’s needs an f embrace satisfaction through service delivery, hence promoting growth. However, the sample size of each research depends on the appropriate data collection method to facilitate the acquisition of better results for business growth.


Butaney, G. T. (2017). Commentary on “Business-to-Business Marketing Textbooks: A Comparative Review.” Journal of Business-To-Business Marketing14(4), 67–77.

CAO, Y., & He, J. (2020). Analysis of problems and policy suggestions in the construction of the business environment in China. EDP Sciences.

edited by W¿єodzimierz Sroka, ¿¡tefan Hittm©Łr., Sroka, W¿єodzimierz, & HittmárS. (2015). Management of Network Organizations : Theoretical Problems and the Dilemmas in Practice. Springer.

Gelderman, C. J., Der, V., Open Universiteit (Heerlen, & 2010. (2017). Business marketing. Open Universiteit ; Groningen.

Gilliland, M., Sglavo, U., & Tashman, L. (2015). Business forecasting: practical problems and solutions. Wiley.

Laudon, K. C. (2019). E-commerce: business, technology, society. Boston; Columbus; Indianapolis; Munich Pearson.

Olexova, V., & Chlebikova, D. (2021). Tools of product policy as part of business marketing in the conditions of globalization. EDP Sciences.

Zimmerman, A. S., & Blythe, J. (2018). Business to business marketing management: a global perspective. Routledge


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