Why Most Small Businesses Fail (And How You Can Succeed)

Before we get started, this article is not meant to dishearten small business owners making them lose hope in their idea. Not every small business fails, in fact, many small business have turned into massive corporate companies! However, it is more common for small businesses to fail than large corporate companies. Small businesses run completely different then large companies therefore they should never be compared. Having a small business is not a bad idea nor is it going to fail, as long as you are aware of the risks and know what not to do. Opening up your own business can be an exciting yet scary process because you are pouring everything you have into it when it has a chance of failing. To better prepare yourself so you can be sure this won’t happen to you, learn why most small businesses fail and how you can succeed:

1. Not In-Touch with Customers Through a Deep Dialogue

The most important thing a business owner is supposed to master is the relationship with the customers. The understanding of your customers is the key to your success, so without it your business won’t last long. An entrepreneur must walk in the shoes of their customers to get a better feel of what their needs are or what they like.

To get in touch with your customers, think about their user experience, rather than what you hope they experience. Check out your website during peak hours—is the load time too slow or the website unresponsive? If so, it might be time to upgrade to a better web hosting service. Are customers even able to find your website when they search products or services in their area? If not, then now is the time to contact an SEO specialist or get in touch with a digital marketing agency to help you get your website and your business onto your customer’s radar.

No matter what, your customers are your most valuable asset. Without valuable relationships there basically is no business. If you feel like you have no connection with your customers and you’re worried your business is on the rocks, start with some real dialogue.

2. Lack of Unique Value

Your business is one out of millions of other business, so what makes it different from the rest? If you think your product or service is the only one out there your mistaken. There are seemingly endless amounts of products and services on the market, whether it’s online slots and casino games, or top-selling mattress. What do these all have in common? Their consumers are reading up on reviews to find out what makes them unique and desirable. Don’t bother spending money on advertising if there is no uniqueness to your brand! Whether it’s a pool cleaner or a trendy boutique, the small business has to show why it is unique from the rest. The business owners who take this lightly are usually the ones who end up in trouble. To avoid this from happening to you all you need to do is figure out the true value your company brings to the table and voice it.

3. Failure to Communicate

Communication is huge! Whether it’s a professional student tutoring service, an e-commerce retailer a famous personal injury law firm, any business owner will tell you that communication is the foundation of success. Without a smooth flow of communication between coworkers, managers, and to the audience, a business cannot survive. It is imperative that a business is run on clear and concise communication. Small businesses are much more fragile than large corporations making strong communication even more important.

Many business owners work too hard on branding, advertisements and design they forget about communicating a clear message. It is pretty straight forward on how to communicate better, it starts with being truly engaged in every conversation. This way you can listen and then use their language right back at them. Here are some helpful pointers when communicating in the work place:

● Be clear with each message you try and convey
● Be concise (keep your messages short and sweet)
● Be compelling (use works to persuade your team or customers to take the actions you want them to)

4. Leadership Breakdown

Sometimes it can be difficult to be the CEO, manager, and co-worker. Owning a small business can often times cause breakdown in leadership roles due to high stress or lack of roles. Leadership breakdown is also caused by poor decision making; not being intentional with your customers, not having purpose behind your motives, and not managing your business in a organized fashion. Not everyone was born to be the perfect leader but if this is your business you poured everything into you may want to be more careful with your decision making. Your solution to leadership breakdown is to realize this small business you started is your baby. If you have leadership issues or anger problems, seek help quick or find someone to run things for you.

5. Budgeting

At the end of the day it is always about what is left in those cash registers. The next most common thing that happens to small business is a failure to manage their money or achieve revenue. If you do not have a strict budget plan or have someone who is managing your money responsibly your business could be in jeopardy. Startups require quick movement in sales without spending ton money on the business itself. The best advice is to think and move quickly.

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