Do you run a small business? If so, Fasten your seatbelt. You’ll need it and you need a business coach as a partner. Here’s why. It’s often said that more than half of new businesses fail during the first year. According to the U.S. Bureau of Labor Statistics (BLS), this isn’t necessarily true. Data from the BLS shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. These statistics haven’t changed much over time, and have been fairly consistent since the 1990’s. If this sounds, bleak to you, I actually like these odds. Here’s why. That means small business owners have a better than 50% chance of making it for 5 years. If you are properly set up with a great offer for clients, you can do this.
Today, I want to talk about two things. First, the main reasons that small businesses fail. Then, how I can help.
Let’s dive into the six big reasons small businesses don’t make it.
- Leadership failure.
Yes, it’s us. Your business can fail if you have poor management skills, which can be evident in many forms. You will struggle as a leader if you don’t have enough experience making management decisions, supervising a staff, sales knowledge, finance or having the vision to discern next steps. Who has all of that? You need a mentor partner to guide you.
- Business Plan Problems.
How many of you are saying “what business plan?” Too many. A solid and realistic business plan is the basis of a successful business. In the plan, you outline achievable goals for your business, how your business can meet those goals, and possible problems and solutions as well as the strategies and timelines that should be implemented and met. Once you have the plan, you should follow it. If you start doubling your spending or changing your strategies whimsically, you are asking for failure. Unless you have found that your business plan is overwhelmingly inaccurate, stick with it. If it is inaccurate, it’s best to find out what’s wrong with it, fix it, and follow the new plan rather than change how you do business based on quick observations. Having deep discernment and honesty with yourself is necessary…and very hard. This is a key point where having a great business coach helps. Many people not only have a hard time establishing a business plan and also admitting when it’s not working and knowing how to pivot.
This is the biggest cause of failure for small businesses. Address financing needs realistically and having a strategy for obtaining funding. Know about alternative sources of financing. It’s a fine line between spending the necessary money to get the business off the ground and overspending. Lean financial strategy is employed at times in virtually every small business. Do you know the resources you have at your disposal? I find that the vast majority of small business owners don’t. I can help.
- Poor Location, Low Internet Presence, and lack of a Marketing Plan Do you have a plan to advertise your business? Is it a plan that you execute against? For many small businesses, the answer to both of these questions is “no.” Having a plan and not executing is no more helpful than not having a plan at all. A bad location is self-explanatory if your business relies on location and many do. Just as dangerous is a poor Internet presence. These days, your profile on the internet and your social media strength is as important as your company’s physical location. An online presence will let people know that they can give you their business, so if the need is already there, the availability and visibility of your business is the next important step. I can help you get the basics going and refer you to a great professional for the implementation and ongoing maintenance.
- Being rigid. My business today bears little resemblance to my business five years ago. It’s still a coaching business. That’s about it. My ideal client has changed and the scope of what I offer has altered dramatically and I’ve made more money as a result of being aware of how I could use my existing skills to help clients more extensively. Don’t become complacent. Monitor the market and know when you may need to alter your business. Being on top of key trends will allow you the needed time to adjust your strategy so that you can remain successful. Huge industries have seen massive changes and no one is immune.
- Improper Expansion. Things are going so well that you are ready to grow! This is the best feeling. You must treat the expansion with the same care as an original business plan. There’s more at stake. If you’re expanding the reach of your business, make sure that you understand the areas and markets into which you’ll now be reaching. The best run retail establishments that have done this hundreds of times do this very well through thorough research each time. If you’re expanding the scope and focus of your business, make sure you understand your new products, service and intended consumer as much as you do with your current successful business.
When a business expands too fast and doesn’t take the same care with research, strategy, and planning, the financial drain catches up quickly. A solid strategy is a must. You need an experienced business pro to help with that.
It is impossible to see all the angles on your own, and many people don’t have the knowledge in every area. I know this firsthand. I’m a small business owner who’s passed that critical 10-year mark. I bring to a business coaching partnership 30 plus years of leadership in all aspects of business including sales, human resources and finances. I offer the outside eyes that you need along with solid business acumen and fractional Chief Human Resource Officer services. Entrepreneurship may be the road less traveled, but sometimes the rougher the journey, the more worthy the adventure.
Reach out to me at email@example.com and check out my website at brendaholley.com. That’s Holley. Thanks