5 often neglected things that lead to small business failure
A gloomy topic, but if we can avoid these 5 things we'll all be much happier (and more successful) small business owners.
Starting a business for the wrong reasons
Get rich quick! Stop working for the man! It's not quite as easy as that. You need to have a passion for what you do. Working for yourself is no walk in the park and it does take a great strain on you both physically and mentally. You will most likely experience setbacks and disappointments, the winners have the balls to push past the setbacks strive forward.
Lack of research and planning
The best way to get started is to have a clear vision of the what, why and how before you go in to business. A business plan can help you start on the path to success, it becomes your business resume. Yes, I know that seems like such a boring task, and it does require brain power. It becomes your road map to success, not to mention if you need to do any lending the banks love it!
This applies to both your position in the market and your physical location. Consider your competition and your accessibility. Know your competition, what’s your point of difference? Can you see a gap in the market, an area that is not already being serviced by your competitors? No point trying to compete for business in a saturated market.
Poor financial control often leads small business to failure. Common problems for small business include taking on too much debt, lack of record keeping, and not retaining enough reserve capital to carry you through seasonal declines, unexpected hiccups or even pay your BAS when it’s due.
Some small business operators gauge their success by rapid growth. In fact, growing too fast is a common cause of cash flow crisis and bankruptcy. Rapid growth places enormous stress on your organisational, financial, and employee structure. To accommodate growth, go back to the drawing board. Review your business plan. Make sure that you understand why your business is growing so that you can respond to your increasing customer base or demand in an effective way.