|Small Business Guide - Small Business Resources
(Add to Favorites | View All Articles | Resource Directory)
Just being good at your profession is not enough to succeed in business
Why Small Businesses Fail (or Fail to Thrive)
Tammy, a skilled and gifted horticulturist, called me to discuss what she needed to know to start her own florist and landscaping business. She had been in the horticulture industry for 10 years and was incredibly skilled at working with flowers and plants - one of the best. She also had great design skills, as well as good customer service skills. But she had little business management experience and less self-employment experience.
Discovering why small businesses fail was a smart research project for her, as it helped her uncover her own weaknesses and begin to build up some strengths before she invested in becoming self-employed. It's no secret that a large majority of small businesses fail in the first five years. The question is: Why do they fail and what can I do to prevent problems in my own business?
As we talked, we reviewed some of the common reasons why small businesses fail. Here are 14 top reasons, which might help you to determine why your business isn't growing and thriving. Some of them are related to learnable business skills; others relate to personal attitudes, habits, or self-sabotaging belief, which are not so easy to change, except through coaching or other self-development work.
1. Mistaking a business for a hobby: Just because you love something doesn't mean you should convert it into a business. Too often businesses fail because the owner feels their passion is shared by others. Research your business idea and make sure it's viable.
2. Poor planning: Yes, you must have a business plan. It can be a simple three-page plan or a huge 40-page plan. The point is that you've looked at all the aspects of your business and are prepared to handle problems when they arise. Your business plan helps you to focus on your goals and your vision, as well as setting out plans to accomplishing them. And don't get mellow - revisit and revise your business plan annually.
3. Entrepreneurial excitement: Entrepreneurs often get excited about new ideas, but are unable to determine if they're "true opportunities" and/or put them into practice. Test every new idea against your business plan and mission statement before deciding whether to undertake it or not, and ask yourself, Do I have the time and skill to implement this?
4. Putting all your eggs in one basket: Too often, small business owners will have just one product, one service or one big client. They cling tight to this one thing because it brings in good revenue. But what if the one thing disappears? Variety and diversification will cushion you against the ebb and flow of business tides.
5. Poor record keeping and financial controls: Yes, you have to keep financial and business records, you have to review your revenue and expense report each month, and you have to file taxes and other business-related filings. If you don't know how to do these, or don't want to, get help from someone who does.
6. Lack of experience in running a business or in the industry you're entering: There are so many hats you have to wear, from marketing and selling in order to run a business effectively. On top of that, you have to understand your industry, the skills required to offer your products and services, and the trends in the industry. If you don't know about these basic skills, educate yourself. Talk to others who are successfully running their own businesses, talk to industry leaders, get a book, find a website, get a coach, do your homework. And keep increasing your business and industry skills by attending classes or reading new books every year.
7. Poor money management: You need to be able to live for one to two years without income when getting started; often businesses are very slow to get off the ground. Also, you have to create and use a realistic business budget, and not constantly drain the business income on personal spending.
8. Wrong location: If your business runs out of commercial space, you need to make sure that you are convenient to your customers, and near to your suppliers and your employees.
9. Competition: Customers will go where they can find the best products and services. It's important for you to know who your competition is, what they have to offer, and what makes your own products or services better.
10. Procrastination and poor time management: Putting off tasks that you don't enjoy will sink your business faster than anything else. You can't afford to waste time on unimportant tasks while critical tasks pile up. All tasks need to be done; if you don't like to do them (or don't want to spend your time doing them), hire someone to do them for you. If your time management and prioritizing skills are rusty, hire a small business coach or take a class to help you.
11. Ineffective marketing: Learn the basics of marketing and make sure that you track the success or failure of each marketing technique you use, then dump those that aren't working.
12. Ineffective sales techniques: Once you have a potential client, you have to know how to lead them down the sales path. If you don't understand the basics of selling, get some education on it immediately. If a selling technique doesn't work, try another one.
13. Poor customer service: Once you have a customer, you have to keep them. There are two key points here - make sure you pay attention to what the customer wants (and how these wants can change over time), and make sure you provide quick return of phone calls and emails, proper billing, win-win problem solving and an overall pleasant demeanor.
14. Entrepreneurial burnout: owning your own business requires a huge investment of time, money, energy and emotion. It's easy to work long days and forget to take time off. But in the end, this only causes burnout where your motivation and creativity will suffer, and a pessimistic attitude prevails. You'll find yourself unable to balance your business and personal life, and both will suffer. Schedule self-care time into your work week and be religious about taking time off from your business.
Dunn and Bradstreet recently did a study and determined that "90% of small businesses that fail do so because of a lack of skills and knowledge on the part of the owner." However, D&B also did a study that showed that over 90% of small businesses were still in business after five years IF they had the help of a Small Business Development Center (SBDC) or other expert assistance. You can find a list of the SBDC in your area here:
As Tammy and I concluded our coaching session, she made a list of the areas where she needed to grow, and created a task plan to get the help she needed. Today she has a thriving business and is happily self-employed. You can do it, too. It just takes a little planning and a close look at both the reasons for your success and where you might need to get a little help.
About The Author
Karyn Greenstreet is a Self Employment expert and small business coach. She shares tips, techniques and strategies with self-employed people to boost clarity and focus, create sustainable motivation, and increase sales and profits. Visit her website at www.PassionForBusiness.com
News provided by Yahoo! News and Google News
'Small Business Basics Series' begins in March
GST burden killing small business
SurePayroll Small Business Scorecard(R): Small Businesses on the Hunt for New Hires
Lt. Governor on pro-business legislation: 'We're on the cusp of changing our ... - Albuquerque Business First
Investors leading surge on small-biz loans - Insurance News Net
Pair launch equity crowdfunding platform for small-biz owners - Crain's Detroit Business
Small Business Economy Continues To Grow Modestly
If you are discontented, there is no real success
Did you know that satisfaction is the number one emotion people want to experience about their life and business? Yes, fame and fortune are up there, but satisfaction is the key. Satisfaction is about contentment, gratitude and pure joy.
Hosted PBX, Is It Right For You?
"Order Now!" "Your Business Will Fail If You Don't Have This New Technology!" "Your Competition Has This Tool, Why Don't You?" Does any of this sound familiar? Does it make you cringe? It seems to be impossible to keep up with all the new trends in business today. It's hard to know which trends are just flash in the pan gimmicks and which are valuable tools that your business can actually benefit from.
5 Steps To Success for Small Business Owners
Everyone wants to succeed in life. Most people want to succeed in business.
What Is YOUR Value Proposition?
Every company has a value proposition. That is a statement of their perceived value to their clients.
Keep the cash flowing inward
Cash is King..
Focus on what you do best, delegate the rest
Do you know what your genius work is? It's the highest and best use of your time. It's the best leverage your business has in the marketplace.
Small Business Franchise Opportunities
Many businesses offer small business franchise opportunities. There are many things that are needed for a small business of this kind, but the rewards are great.
Expanding your business.
Are you a small business owner who wants to expand your business? Do you need to add another professional location to your company to test and explore a new market? Does a prospect of spending thousands of dollars to find a right location, sign a new long term office lease, purchase or lease office equipment and hire new employees holding you back?Virtual office center may be the answer for you! The concept of virtual office is not new but with advancements in latest internet/communication technologies, the idea of virtual office has become far more appealing for a wide range of businesses. The reason for that is a marriage between computers, internet and telephone systems.
Small Business Opportunities Magazine Business
A Small Business Opportunities Magazine is one of the new small business opportunities opening up everyday. More and more companies are looking to outsource for basic services, cutting their budgets in the process and increasing profits.
Street Wars Between Mobile Car Washers and Mobile Auto Detailers
There is much competition in the mobile auto detailing business. There are two different lines of reasoning emerging as to how the business should be run.
More Business Card Uses
Why would you use an event pass?Event passes are often used as giveaways to entice people to attend some event. You will find that most time-share companies will have passes to be used to attend their spiel, plus they also give away other goodies.
How To Create A Business Note That Is More Attractive To A Note Investor
You are selling your small business (business value under $1 million for this article). You would like the buyer of your business to come in with an all-cash offer, or be able to qualify for an SBA guaranteed loan.
How To Ruin Your Business
If you're like the rest of us, you've spent a lot of time trying different things to make your online business come together. There are countless methods of conducting a viable marketing career, but there are also as many ways to destroy one as well.
5 GREAT WAYS to Gain New Contacts
What are the 5 best ways to gain new contacts?There are many ways to use the media to promote your business. You must ultimately decide what is best for your business.
Genius Time? It Matters
I frequently give presentations at small business gatherings, providing me the opportunity to have engaging conversations with owners about the challenges they face. Based on their input, the economy continues to plug along, heading in the right direction, and distancing itself from the difficult journey of the past few years.
Dont Wait - Sell The Future Now!
Just as you are about to say "good-bye" to your hair stylist, you get the question, "shall we make our next appointment?"Most businesses sell products or services that are cyclical in their "need" curve. In other words, the client has need of your product at regular intervals of time.
Consistency Builds Trust
You know your prospects need what you sell. You know they want what you sell.
Image of Your Franchise Automotive Outlet is So Important
Image of your franchise automotive outlet is so important. Some say image is everything, well then if you buy a franchise you should be constantly thinking of image and cleanliness.
Creative Marketing Tips: Simple Things You Can Use In Your Business To Attract More Clients
The single most important activity you can do in your small business is create a unique marketing strategy and plan. When was the last time you saw a company marketing themselves in an outrageous way? In this day and age it looks like everyone has read the same book on marketing - and sorry to say - that book doesn't work!What does work - is a little creativity, a little personality and a lot of effort to make yourself so different from your competition - that there is no real competition.
Common small-business marketing failures
When you feel like you're always busy working on your business, but not getting where you want to go, it can be frustrating trying to figure out how to get your marketing on track. It can easily become a "not seeing the forest for the trees" feeling.
|Home | Site Map | Privacy Statement | More Articles|