Launching a small business is much easier today than it used to be. The internet is a flexible environment where entrepreneurs of all sizes can bring their dreams to life.
However, just because there’s a lower barrier to entry for would-be business owners, doesn’t mean that all companies will be successful.
According to research from the Small Business Administration, only around half of all new businesses will survive their first five years.
Some studies report even bleaker statistics, saying that many businesses fail before reaching the end of their first year.
Figuring out how to avoid problems as a small business owner means learning about the most common reasons that small businesses fail and discovering what you can do to prevent those issues.
Here are a few insights to get you started.
Poor management is more of a problem for your business than you’d think. If you don’t have the right management skills to keep your team members motivated and moving in the right direction, you’ll struggle to accomplish much.
To avoid leadership problems, stop and think about how you inspire your team and help them achieve their goals.
Are you supportive when your employees need extra help? Can you provide the guidance that your team members need, or is your door always closed? Do you invest in the tools that your staff need to do their best work?
It might be worth investing in some leadership training to help you and the other supervisors in your team come out on top. There are plenty of courses out there that teach people how to master leadership in a way that boosts employee satisfaction and productivity.
Lack of Sales
Before you do anything in your company, make sure to plan exactly how you’re going to make a profit.
Start by evaluating your marketplace and choosing your target audience. You’ll need a complete buyer persona that describes the person most likely to respond to your business model and strategy.
Once you know who your target customer is, you can start building a strategy that addresses those people’s needs and expectations.
It’s also worth analyzing your competition from time to time too. Knowing who your competitors are will help you figure out where you need to strengthen your strategies to compete on a bigger scale.
There are few things more critical to any business than sales. You need to be constantly generating income if you want your organization to succeed.
Without a solid financial foundation, you won’t be able to sustain your current operations, and neither will you be able to grow over time.
Refusal to pivot
It’s important to have a plan that you can stick with as a business owner. This will prevent you from going on track whenever a new trend emerges in your industry.
However, that doesn’t mean that you should stick to one strategy no matter what.
Sometimes, trends in your landscape will come and go. But knowing how to keep track of what’s happening in your marketplace will make it easier to see what really affects your customers and your chances of sales.
It’s important to avoid getting so deeply entrenched in your plan for success that you fail to recognize when your strategies aren’t working.
Keep checking your marketing and sales methods to ensure that you’re moving in the right direction to suit the needs of your target audience. Reporting tools and marketing software will help you see which of your efforts are yielding the best results.
If you notice something that indicates you need to change track for a while, be ready to pivot.
Remember that the business world is always changing. Knowing how to change with it will improve your professional profile, and help your company to thrive.
There’s a lot more planning involved in running a successful company than most people realize. A business plan forces you to think more carefully about what you want to accomplish as a growing brand, for instance.
With your business plan, you can define your Unique Value Proposition and encourage investors to take notice of your business.
Planning out your marketing campaigns before you invest too heavily in them can help you spot any gaps in your strategy. This means that you don’t over-spend on an idea that may not generate results in the long-term.
Sadly, you can’t plan and prepare for every disaster that might strike your business. You can, however, set your business up for faster recovery and cushion unexpected losses at least a bit.
One of the essential documents you’ll need to create for your company is a disaster recovery plan. No matter what kind of business you run, there’s always a risk that something could go wrong.
Having a disaster recovery plan ensures that you can respond quickly to issues like lost data or damaged tools. This means that you can spring into action faster before losing too many customers.
Finally, business owners often underestimate just how valuable their marketing campaigns are. Remember, there are hundreds of thousands of other businesses out there. Many of those companies will be competing to attract the same audience as you.
If you want to stand out from the crowd and earn the right sales, you need a marketing strategy.
Start by identifying what kind of marketing efforts are going to resonate best with your target audience. You could conduct polls so that you can add more information to your user personas.
Also, track the results of your promotional efforts so you can see which works best.
Remember to have a list of critical metrics in place that you need to keep an eye on too.
For instance, what’s your return on investment for different marketing strategies? Do you know how much budget you have to spend in each area, and how much reach you get from each platform?
Don’t Become Another Failed Business
There are many amazing opportunities available today for ambitious entrepreneurs.
However, the path to success is littered with challenges to overcome.
Making sure that you’re properly prepared can help you avoid some of the mistakes mentioned above.
Contributed post by Ashely Wilson
Ashley Wilson is a content creator, writing about business and tech. She has been known to reference movies in casual conversation and enjoys baking homemade treats for her husband and their two felines, Lady and Gaga. You can get in touch with Ashley via Twitter.