Well over 90 percent of small businesses will fail. Think back about all the small businesses that you know that have failed over the years. There was no doubt several of those businesses were built upon great ideas, but they still weren’t able to stay afloat. This recommended site helps businesses, small and large help, overcome many of the obstacles that we’ll talk about below.
Not having enough startup capital
Starting a business is an expensive venture, and you need enough cash to make it happen. Now, listen up; you don’t need cash, credit will work too. If you’re lucky enough to have investors, that too will work. The point is you need to make sure that you have more than enough money to help you weather the storm.
The most significant problem small business owners face is they think their business is going to be successful from the very beginning. Rarely does that happen, and if you aren’t successful right out of the gate, and you don’t have enough money to help you get through the lean times, you’re going to have to close up shop and shutter your doors.
Not knowing how to manage your finances
It’s not just enough to have the capital; you also need to know how to manage it. That means you’ve got to account for every penny that comes and goes from your accounts. There should be zero money that is left unaccounted for.
Years ago, managing your finances was much more difficult because you had to use a pencil and paper along with a calculator to do everything. These days, there are software programs that do all the work for you. All you have to do is enter your information, and it will do all the calculations, and it will allow you to see what’s going on with your cash flow.
If you’re not the nerdy type and can’t do all this yourself, you need to hire someone to do it for you. Depending on the size and scope of your business, you might be able to hire someone for only a few hours per week to help you control your finances.
Poor leadership skills
Leaders are often born leaders, though sometimes, you can learn how to lead. You lead by example, and if you don’t, no one will take you seriously. You can’t expect people to work weekends if you’re not willing to work weekends.
Always remember that leadership comes from the top down, no matter in business. You are the prime example of how your employees will expect how you want things done. If you show up to work on time, properly dressed, and ready to face the day’s challenges, your staff will be as well. If you’re late, you come in looking haggard, and you don’t take your job seriously, you should expect everyone to mimic your mindset.
High employee turnover
Unless you have a business that is super easy to run, you’ll need experienced quality workers. That means you’ll need to figure out how to keep the rock-solid employees while letting go of the ones that don’t work out. How do you keep good employees? By treating them like rockstars.
If your small business always has a help wanted sign on the door, there’s a problem. You’ll need to figure out what is making people quit so quickly. You might be hiring the wrong people, not paying them enough, or your expectations of them are too high. If you plan on succeeding as a small business, you’ll need to figure out why your workers are leaving in droves and do something about it.
The top reason businesses fail is not understanding the competition
You need to know what makes your competition successful. What are they doing right that enables them to stay in business? It’s okay to go in their business undercover and try to figure out what they’re doing that you’re not. Walk around, talk to the workers, try their products, and do whatever it takes to see why their customers are so happy.
Market research is one of the most overlooked aspects of business. Do your due diligence and make sure you know your competitors like they’re the back of your hand. Get to know everything about them, and when you do, you’ll see their strengths and faults, and that is what you can use to give you a competitive edge over them.
