The term “dog eat dog” is a gross understatement when applying it to small businesses. A mind boggling fact: 80% of all small businesses will fail within the first few years of operation. This is a very sobering statistic, even if you’re not trying to run a small business.
When you open it up and examine what a small business is, you find that it’s truly the life-force driving a capitalist environment. Excessive greed aside, small business is a staple of any solid economy, and more should be done to ensure they do not fail. But, fail they do, and in no particular order, the top-5 reasons small businesses sometimes don’t make it…
- No niche is a bad niche. Some businesses have trouble developing a customer base. These “niche” markets are essential in the success of any business, big or small, and whether you have an online business or run a land-based institution, having a customer niche is important.A niche must be catered to. For example, if you’re hoping to appeal to the Emo/Goth crowd with your clothing store, then having sporadic racks of I-Love-Hippies clothing will not do. A niche of any kind allows a small business to compete with a big business. Your niche will ultimately choose your business – but it’s up to the business owner to go after the niche.
Looking for loot in all the wrong places. If you’ve just opened a business solely for money, then you’re probably going to fail. “Why,” you ask. It’s because you’re only worried about profit – you’ll cut corners and do whatever’s necessary to earn a buck. Conversely, if you opened a small business for other reasons, let’s say, a small sandwich shop because you love making sandwiches, more goes into your business and money isn’t the 500-pound elephant.
- Locate the right location. In high-school business class we’re taught that location is a key to success. The right location is essential, and therefore, the wrong location is the number-three business killer.You have to set up shop where the customers are located; where traffic and accessibility are minor concerns; where you’re not in stiff competition with other businesses; where you can target your niche, and hopefully brand your business in the early stages.
- The leap of faith. You may think your heart is in the right place but faith and thought are two separate things. A lot of planning needs to go into your business. It is critical to have a plan in place from day one.If not, you can kiss that business goodbye before the grand opening. Consider a team to help you plan every conceivable detail, which leads us to number five…
- Putting an “I” in “team.” Don’t start a business all by your lonesome – that is, unless you crave failure. Put together a team of people, that don’t necessarily have to be paid-for-and-bought professionals, to help you along with the process. The saying, “Two heads are better than one” applies here, even if it’s the opinion of some family members.
You need help with details that you may have overlooked and more often than not, other people offer different perspectives that may be interesting avenues to pursue.