How to Keep Your Small Business from Failing
According to recent reports, the economy is booming, and it seems that now would be an excellent time to start a new business. The failure rate of new businesses is sobering, though. Bloomberg research shows that eight out of every ten businesses fail within a year and a half. The keys to success we will outline here seem simple, but keeping your eye on them from the beginning isn’t always easy.
Many businesses simply fail from the top down. If management has superb goals and ideas but no experience in leadership, supervising staff, making hard decisions and working as a team will be exceedingly difficult. Dealing with staffing or logistical problems is difficult if management is lacking communication skills, neglects to train staff properly or tends to avoid conflict or challenging situations. Hire carefully to ensure sure you have strong, fair and experienced management in charge. Before you start your business, take a look at some successful business practices to adopt from the very beginning.
Another key to success is being sure that you’ve found a customer need/service that is completely unique and exceeds other similar existing products and services. When you’ve identified how and what your business does better than anyone else, build your marketing strategy around that. The most successful businesses have a strong brand built around the simple idea of a unique service or product that meets an identified consumer need. Make sure that you have marketing expertise in your arsenal from the get-go so prospective customers know exactly what you can offer them. Your marketing must include a solid, well thought out online presence, including social media, well written and optimized content on your site, and ways to encourage interaction with your customers.
In addition, your business model and financial plans must be thoroughly thought out and researched. Again, find other similar businesses and services that do something similar, and create a comprehensive business plan including predictable revenue, marketing, competitor activities and possible obstacles to your success. Have a plan to overcome challenges, complete with timelines and goals. Financial management can be the most difficult obstacle for some new business owners, but it has become so much easier with available professional accounting software. Learn how to keep excellent records, and consider employing an accountant or tax professional to ensure that you are aware of the financial status of your business at all times. If cash flow problems are holding you back, you might consider working with a factoring company to provide you with the funds you need to grow.
Lastly, plan and research growth after you’ve started your business as carefully as you planned the opening. Again, research is key. Even the most highly recognized franchises that most of us think of as too well established to fail plan each step of their growth with meticulous information gathering regarding demographics, spending trends and local and area growth trends. Don’t overextend yourself financially in expectation of business that hasn’t materialized. If you are considering additional inventory or locations, make sure you’ve planned every step of the way and are sure of supply and demand.
You can succeed; in fact, you have a good chance of it, if you’ve done your homework. Surround yourself with information and people who are knowledgeable and passionate about your concept. Keep your eyes open and on your goals, and be aware of the status of your day to day operations, and you’ll be giving yourself the absolute best chance of success in today’s promising economy.
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