Success in a Small Business
When you Google ‘Small Business’ so many items pop up. Everything from “Best Small Business Ideas” to “Small Business Financing” to “Small Business Support” and “Small Business Technology.” The truth is that you’ve probably already had an idea in the back of your head for a business and are ready to start refining it. Or maybe not.
Small businesses account for 99.7% of business in the USA or 28.8 million business. That’s huge. But the failure rate is 70% by Year 10, with 20% in the first year. So why do they fail? By looking at the reasons for failure, we can also determine how to be successful.
According to Visual Capitalist, the top reason small businesses fail, at 82%, is cash flow problems. 42% fail because there’s no market for their products or services. 23% don’t have the right team, and 19% are outcompeted. So what can we learn?
42% fail because there’s no market for their products or services
Invest in the right idea. Research, research, research. What businesses work the best? Health care and social assistance win with an 85% first year survival rate. Whatever your business, test the waters with your idea first; post videos, give it to people to try out, crowdfund with Kickstarter or another money raising platform. Find out if your idea is viable and needed.
23% fail because they don’t have the right team
Invest in your team. Search for the best people to surround yourself with. Look for people who support your vision, who have knowledge in areas you don’t. Create a close knit team that supports you and each other.
82% experience cash flow problems
Cash flow can be a huge problem for any startup. Starting a new business takes money. Expansion takes money. Building the right team takes money. Consult with your Small Business Administration office near you to find grants or loans that may be applicable to your business. Crowdsource. Explore every avenue.
14% fail because they ignore their customers
In the beginning it’s very tempting to go after any customer you can get. Fight that desire. This is where your market research pays off. Decide who your customer is and the target that demographic. Who needs your product? Who can afford your product?
Use Social Media to have conversations with your customer base. Engage your customers in conversation. Only 20% of your posts should promote your business, share special offers, etc. People are very savvy when it comes to social media and will stop paying attention to a page if they feel it’s not personal enough or doesn’t pertain to them. So learn who you want your customer to be and then target them.
When planning and starting your small business, it is crucial to get off on the right foot. Too often people rush into their new, fresh idea, without a lot of planning, missing critical steps. Find your resources and utilize them well.