Small businesses are usually given a less than even chance to last more than 3 years and over a fifth of these will not even reach the 12 month milestone. However, this is not written in stone and many of these companies are doomed to failure due to the thinking behind the brand. This article looks at 4 of the most obvious and common reasons why you and your small business just won’t cut it into today’s ultra-competitive world of commerce.
Poor Market Research
If you think about the reasons behind your new business, you have to know exactly who it is that you intend to sell your services or products to. There is little point in having an awesome end product if you don’t have a marketplace to sell it in. Market research may seem like a boring waste of time, but it is vital for your success. Look at a similar product or service that is already out there and do some research into the demographic that invest in your rival’s brand. Even if they aren’t identical, you will certainly be narrowing down your target and can start to tailor your sales campaign in that particular direction.
Weak Financial Planning
Even if you feel that your line of business can be carried out without too much of a cash injection, you still need to allow for any bumps in the road. Because you really have to prepare for anything and if you run out of capital, you may as well just walk away and not look back. It is always a good idea to draw up a solid business plan and seek some financial backing at some point. Even if you just need the capital as a backup, it could well be vital in the months to come. You should always allow for a contingency plan to come into play and this usually involves cash at some stage of proceedings.
Hiring The Wrong Staff
If you are surrounded by quality people who can be trusted and relied on, your business will have a good chance of success. But if you have the wrong people in your trust, the opposite will certainly apply. Inexperienced business owners often overlook these basic facts and as a result, they make up that 20% we talked about earlier. You could ask an experienced and trustworthy friend or ex-colleague to help with recruitment and you may be fortunate enough to hit the jackpot first time.
Ignoring the Competition
They say that you should keep your friends close and your enemies closer and that certainly rings true in the world of small business. You should find out who your competition are and keep a very close eye on them thereafter. Any useful information about your rivals can be fed into your marketing plan and try to offer something that these people clearly do not have in place. Look at their customer base and see if you can’t relieve them of a few of this demographic by way of offering a better and more price effective service.
Follow these tips and you could well be looking at a fresh new start and a fruitful future!