If you’re a small business owner, you’ve probably read some of the statistics on the failure rates of small businesses. Around
20% of small businesses fail in their first year, which might seem like a small amount, but if your business is in that bracket then it doesn’t really matter, right? Here are 5 reasons small businesses fail – and 5 reasons they manage to succeed.
FAIL: Neglecting personal life
One of the most important things you can do as a small business owner is to remember that your business, while it might sometimes seem like your life, shouldn’t take up all of your life. Remember to keep a close eye on your personal relationships and, most crucially, your personal finances. If you’re struggling, there are plenty of
dependable personal loan companies you can apply to – this could also be a great way to bolster your business funds.
SUCCEED: Staying focused
When you start your business, it’s a good idea to create a mission statement. What do you want your business to achieve? By the one-year, two-year, five-year and even ten-year marks, where do you want your business to be in terms of customers, cash flow and other important things? By sticking to that mission statement, you’ll ensure you never lose sight of the reason you got into this business in the first place.
FAIL: Lack of belief
You need to believe deeply in your business. If you don’t believe in what you’re trying to achieve, then your clients won’t either, and your defeatist attitude will rub off on not only your client base but your staff as well. There’s no point starting a business if you simply believe you’ll be defeated by bigger and more well-known alternatives; instead, be clever with marketing, take victories where you can find them, and you’ll make a name for yourself.
SUCCEED: Clever staffing decisions
When you’re
hiring staff, you need to look very carefully at the information you receive from each prospective candidate. If it seems like one person has all the right experience, that’s great, but experience isn’t everything. Another candidate might just have a better attitude at interview, or their covering letter might read better and have fewer spelling mistakes. The right candidate for the job isn’t always immediately obvious, so don’t always go with your gut instinct on this one.
FAIL: Lack of communication
Your staff – if you have any – need to be clued in at all times on the general direction the company is taking and the challenges it faces. If something’s amiss, your staff will be the first to notice, especially if you’re being furtive or deliberately not telling them something.
Holding regular meetings with staff will keep everyone on the same page, and it’ll help people have realistic expectations of where the company will go next – if you’re unable to pay a bonus, you need to tell people rather than letting them find out at the last minute.
SUCCEED: Perseverance
Don’t allow failures to define your attitude towards your company. Every single business will, at some point, make a decision that leads to failure. Maybe it’s a client you shouldn’t have taken, or maybe a client who seemed legitimate bails at the last second. Whatever leads to the failure, you need to pick yourself up, dust yourself off and learn from it. Dwelling on that failure instead of using it as an experience will only lead to more failure.
FAIL: Stubbornness
If your industry is one that is rapidly changing, you need to have the right attitude and learn how to adapt to those changes. Examples might include the tech industry, social media or e-commerce. The methods by which those businesses succeed change all the time; e-commerce businesses might have succeeded by supplementing products with additional offers before, but now customers might feel bombarded by excessive offers and get burnt out. You need to keep up with the times in whatever industry you’re in.
SUCCEED: Good market research
Knowing your demographic at all times will enable you to continually pitch your product towards an audience’s changing tastes. If you’re aiming at a certain age group, for example, you need to know what their desires and worries are, and target your product towards those desires. Does your age group respond better to direct marketing or to social media influencers? You need to know how best to reach your demographic at all times, and the best way to do that is with thorough market research.
FAIL: Poor leadership
Hiring the wrong management staff can have a seriously deleterious effect on your business as a whole. This might only apply to those who do hire staff, but even you can be prone to
poor leadership decisions, and if you find yourself making bad calls constantly then you need to conduct a serious self-assessment. If you want your business to succeed, you need to make sure that the people making the decisions are competent, skilled and capable of self-reflection.
SUCCEED: Time management
It’s no use taking a break at a time when the company really needs you to deliver. Good entrepreneurs and business owners know that a company will require a huge amount of their time and effort. Saying that, it’s also a good idea to know when a break is necessary. If you find yourself overworked and getting frustrated, then a break is a great idea. Similarly,
allocating the right amount of holiday to your staff is crucial – you might want that project finished, but your staff will only resent you if you don’t let them take time off now and again.
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