👎The Top 5 Ways Small Companies Fail + How to Avoid Them!
1️⃣ Lack of a well-defined business plan and clear goals: Having a clear understanding of the business's target market, competition, and financial projections is essential for the success of a small business. Without a solid plan in place, it can be difficult to effectively allocate resources and make informed decisions.
👉 Avoid this by removing distractions when starting up. Many of the business owners we've worked with and spoken with have a case of 'Shiny Object Syndrome' #squirrel and get pumped about something while the "boring stuff" gets left for another day.
2️⃣ Insufficient capital: Starting and running a business requires a significant amount of capital, and not having enough money can be a major obstacle. Inadequate funding can lead to financial problems, such as being unable to meet payroll or pay bills on time.
👉 Avoid this by doing step #1 above but also being true to your purpose and not trying to overdo things. Service-based businesses often try to give everyone everything. This sounds nice but you end up being a master of none. Focus your efforts and your capital will go further.
3️⃣ Poor management: Effective management is crucial for any small business. This includes having the right team in place, establishing clear roles and responsibilities, and making sound financial and strategic decisions.
👉 Anyone ever has a shitty boss? We all have. Proper management has to start from the top. If that's you, you need to hire the right people and give them clear goals to achieve and then communicate quickly and clearly for both positive and constructive (aka negative) feedback. Not doing this will make good workers seem lost and unnoticed and will breed poor effort in the other half.
4️⃣ Lack of differentiation: In a competitive market, it's important for a small business to stand out from its competitors. This could involve offering unique products or services, or positioning the business as a leader in a particular niche. Without a clear point of differentiation, it can be difficult for a small business to attract and retain customers.
👉 Avoid this be re-reading #2 above. If you are a landscaping company, be specific in your services or your target market. If you have a coffee shop, don't sell tee shirts. Find your market and ask "what does my company do for this market?" and go deep instead of wide.
5️⃣ Inability to adapt to change: The business world is constantly evolving, and it's important for small businesses to be able to adapt to change in order to stay relevant and successful. This could involve adopting new technologies, changing business strategies, or adjusting to shifts in market demand. Failing to adapt to change can lead to the decline of a small business.
👉 Avoid this by never being content with the status quo. Pre-pandemic a lot of companies would have never thought to push their business online but it was the only way for thousands of companies to survive. Talk to your customers a LOT, this will give you insight that companies would pay dearly for.