I recently read a great article on NBC.com entitled “Starting a Small Business Begins with Overcoming Your Fears.” The piece has some great tips for new business owners, but it also got me thinking. There is a lot of advice out there for people who dream of being their own boss, but what about the small business owners who have already taken the leap, but find themselves struggling? The cold hard fact is that a whopping 8 out of 10 businesses fail and that statistic leaves many wondering, why? Is there anything these business owners could have done to salvage their dream?
My resounding answer: YES.
However, talking about the ways an owner can save their business isn’t enough. It is equally as important to look at the reasons why a small business fails in the first place. By doing so, we can start a cause and effect dialogue – or better yet, a conversation that discusses the reasons and solutions. So let’s look at some of the reasons why a business might fail and the actions a small business owner can take to prevent the beginning of the end.
Reason #1: You’re not connecting with your customers.
Customer connection, customer satisfaction and brand recognition are all very important. If you’re not having real conversations with your customers then your business is doomed from the start. Make sure you develop a consistent business identity (i.e. logo, location, website, etc.) which represents your company. Next, identify who your best customers are, where they come from and why they do business with you. By understanding their perceptions and behaviors, you are more able to meet the growing needs of your customers.
Reason #2: Your leadership is lacking.
The key to being a good business owner is also being a strong leader. However, this is not something that comes naturally to everyone so it’s a skill that needs to be developed. You should always lead with a vision, the actions and a spirit that produce a positive company culture. Also, try to clearly identify and articulate expectations and outcomes to your team. Don’t be afraid to hold yourself and others accountable for achieving those goals. That commitment is what will propel your business forward.
Reason #3: Your business has nothing that differentiates it from the competition.
If your business does not have any unique factors, what prevents your customers from going elsewhere? You need to create reasons for your customers to keep coming back for more. Provide more than just a product or service, but also unique benefits that make it worthwhile for your customers to remain loyal patrons. For even more tips, read “10 Tips to Help You Build and Grow a Stand-Out Small Business Brand” from the U.S. Small Business Administration.
Reason #4: Your business finances are a mess.
Even if your business is booming if your finances aren’t under control, you could be in big trouble. It is important to have a solid handle on your annual budget, revenue goals, expenditures, cash reserves, just to name a few. The first and most important step is to clearly separate your personal finances from your business finances. In order to have a solid handle on your business money situation, don’t mingle personal cash flow with business cash flow. Next, create an annual budget and use it to guide business priorities in order to meet goals. You might have a million amazing ideas, but don’t overextend yourself financially to bring those ideas to fruition, as it can put your bottom line in danger. If your understanding of any of these factors is minimal, consult a trusted accountant who can help you.
Reason #5: Your marketing is non-existent.
The bottom line is that marketing is important. However, don’t panic; I’m not suggesting that million-dollar commercials or print ads are the only way to make a business successful. Marketing your small business can be as simple as networking if that’s all your finances allow at this time. However, marketing does require commitment and effort. Start by determining which marketing channels are most effective for your particular business whether it’s face-to-face networking, direct mail or e-mail campaigns, social media or something else entirely. Remember, marketing is about creating awareness and preference for your products and company so start thinking about how you can accomplish that goal. By attracting your target market‘s attention and creating the right kinds of impressions, you can compel your customers to respond.
Do you recognize many or all of these problems in your business? Or maybe you just want a better understanding of how to make your business work? Then it’s time to seek out the advice and expertise of a business coach. I can help you save your business from going under, while at the same time helping you create a better work-life balance. Click here to setup a free one-hour consultation with me now.
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