Run Small Business Successfully Like a Pro
According to a publication by the U.S. Small Business Administration dated May 2018, only 7 – 9 percent of employer firms (roughly around 1 in 12 businesses) close every year over the last two decade and a half. Business survival rates are less worrying as well, with two-thirds of businesses have great chance of surviving for 2 years and around half survive 3 more years.
That being said, many of new businesses do fail and never even make it to the first year. There can be various reasons including personal problems (such as illnesses, injuries, and retirement), lack of profits, financial issues, or just poor business decisions. It is also possible that owners decide to close their current businesses to start other new ventures. Some of the most common reasons why company fails, especially new small company, are as follows.
- Reluctance to Adapt: one of the strongest characteristics of a successful small business is the willingness to evolve with the market. Your customers are bombarded on daily basis with new information, trends, political propaganda, and of course offerings from your competitors. Make time and efforts to do market research to figure out new or upcoming trends and then try to implement the freshly found ideas to the goods and services you offer.
- Poor Communication with Customers: in case you haven’t realized it yet, your customers tend to provide accurate honest feedback about your company and products – especially when many things do not meet their expectations. Based on the feedback, you can address the problems accordingly. A practical method to promote good communication practices between the business and the customers is to provide an easy platform where the latter can express their concerns in free convenient manner. Customer Service must be made as effective as possible to make it happen.
- Staying Offline: it makes no sense for startup business of today to avoid using the Internet as both marketing platform and virtual storefronts. The vast majority of customers do research and buy products online. For your business to thrive, you have to make sure that it is visible to thousands (if not millions) of Internet users, especially those in your target market. Use social media, websites, and mobile apps to increase your chances of success to a great extent. For a small business, the Internet provides an excellent effective platform to launch marketing campaign without breaking the bank.
- Ineffective Tracking of Marketing Efforts: there is nothing wrong with launching extensive marketing campaign both online and offline, as long as you have the budget to fund the undertaking. However, you must understand that marketing is more than just spreading the message about your goods and services to as many people as possible. It is more about sending the right message to the right people at the right time. An often-overlooked part of marketing is the monitoring portion; this is where you measure efficiency, ratio between marketing fund and sales, and demographics. It allows you to plan the next marketing effort more effectively and target-oriented.
- Leadership Breakdown: poor decisions triggered by weak leadership skills can only lead to failure. If you are the founder of the business, be dedicated to improve all parts of the venture including product quality, employees’ capabilities, customers’ relations, and company reputation. Good leadership is neither hereditary nor impossible to learn.
Businesses, both startup and established, can fail for a variety of other reasons and more often than not you don’t see it coming until the damage is done. You can avoid immediate pitfalls however, by preventing yourself from making those common mistakes until you gain the momentum to further extend the growth.
Starting or running small businesses is an interesting proposition; it is an excitement of its own class as a matter of fact. You have saved or raised enough money to get things going, and this usually means spending a good amount of that money on what-should-be a profitable venture. You devise business strategies to maximize your chances of survival in the first few years and continue to grow afterward. In addition to the aforementioned shortcomings, every business is not without its risks. Not only do smart entrepreneurs realize and understand the risks, they also plan good strategies to minimize apparent possibilities of pitfalls. Remember that the expectations can be very different from the reality due to the unpredictable nature of market and competition.
Overcoming Business Failures
There is no single definitive formula to get you out of any particular business disaster; no one says it is always going to be easy either. Only one thing is certain: having the right mindset in the middle of difficulties can help you see a consoling aspect of an otherwise impossible circumstance. When you’re up against difficult situations, it is not uncommon to get overwhelmed, depressed, and stressed; as a result, your judgement is clouded and every decision made does not seem to deliver the much needed improvement. Over time, your self-esteem also takes a tumble and you end up doubting your own abilities to run the business.
Instead of blaming yourself and losing confidence, take every setback as a lesson from which you can learn a good deal about running a small business. Doubting your competence does not do any good, and this will negatively impact the business to a great extent. If you run a small business, chances are you have several employees or business associates you trust. Try to get fresh perspective of the situation by discussing the problems with friends, colleagues, families, or even legal advisors if needs be. This does not mean you depend on others to solve your problems, it only suggests that you are willing to listen, learn, and absorb new ideas.
Business failure is to be avoided at all costs, but unfortunately mistakes can happen regardless of how well-prepared your company is. There are times when you are forced to deal with failure, even when it is not entirely triggered by errors on your part. Unpredictability is the key, and the only way to overcome business failure is to predict the seemingly unpredictable. Think about the risks before starting the venture, so you have enough time to craft the best solutions. In general, there are three major risks of running a business:
- Failure: as previously mentioned, chances of failure are real but they are not impossible to overcome regardless of how difficult the circumstances are. Develop a diverse team with different educational backgrounds and professional experiences, so you can engage in productive discussions in every situation. Diverse team has better possibility of developing more ideas.
- Loss of Income: lack of profit does not always translate to failure. Some business owners realize they cannot generate profit right away, so they craft strategies to cover financial losses during the first months (or even years) in business. Manage cash flow properly and make sure you have emergency funds at the ready to cover big losses.
- Health Risk: as the business grows, it is going to be difficult to keep up with all the activities involved including bookkeeping, invoices, marketing, and so on. You will spend countless hours only for taking care of the business but ignoring personal health at the same time. A good way to prevent this is to hire some professionals to help you handle the company for example bookkeepers or drivers to name a few.
Entrepreneurship is a risky undertaking. To make sure your business runs on the right course towards development, sometimes you have to sacrifice steady paycheck, social life, and even health. Learn from other people’s success and failures to help you understand the real-life risks of your business even better and prepare the right strategies to overcome difficulties way ahead of time.