Starting a small business can be a worrying and daunting time for would-be entrepreneurs. With four out of five small business start-ups ending up in failure the statistics are stacked against small business owners. But knowing why small businesses fail could just be the key to making sure yours doesn’t!
Knowing the pitfalls that other small business start ups have made can stop you making the same mistakes. I believe there are six fundamental issues that cause small businesses to fail:
- Lack of planning – I’ve said it before and I’ll say it again, starting a business without planning where you want to go is like starting a car journey with no idea of your final destination; you’re bound to get lost. To avoid this mistake set a clear goal of where you want to be, and how you are going to get there.
- Inability to delegate – Within every business someone needs to keep an eye on the bigger picture; and have an overview of everything happening internally and externally around the company. That person should be you and if you have your head buried in the accounts you won’t. So delegate and outsource all the tasks that can be done by others and free yourself to focus on the bigger picture.
- Unwillingness to change – As a small business you cannot afford to remain motionless as your market and the world around you drives forward. Adapt and develop your small business so it is forward thinking and innovative, not behind with the times.
- Forgetting that cash is king! – A small business needs to keep its eye firmly focused on cashflow, as soon as a business loses sight of this then they are prone to failure. Plot and analyse your incomings and outgoings to make sure your small business stays on the right track. Don’t expect massive profits from the outset, but don’t accept a loss.
- Lack of objective targets – Not measuring the success of campaigns, products or services can be disastrous for a small business. Is that PR campaign your running really worth the money? Does Twitter really bring traffic to your website? Know what to measure and you’ll know how successful you are.
- Not asking the right questions – When you are a small business start-up knowing which questions to ask, and to who, is difficult. I aim to answer as many as I can here on my blog, but a new website, Advicely, offers tailor made answers to your small business questions.
Whilst avoiding these pitfalls won’t necessarily guarantee your small business success, knowing what not-to-do can help you to focus on the things that you should do. I know that small businesses are going to be the making of this country – lets pull together reduce that horrific statistic.
* * *