Depending on where you get your statistics, 50 to 70 percent of small businesses fail within 18 months.There are several reasons I believe this happens. Here are a few ways you can move your small business from Failure to Success.
Cashflow – Many small business owners are so excited about their new endeavor, that their reach exceeds their grasp. They make a few large sales, and then make the mistake of thinking sales equal cash in the bank. Ultimately they should, but if you are not a cash business, you must take into account bad debts, slow payers, and the normal timing of payments. Very few customers pay immediately. That cash cannot be spent until it is collected. Pay close attention to your cash coming in, and cash going out on a regular (weekly) basis.
Spending too much time in the office – Sometimes, our ego gets the best of us. We have a new office space, some employees, new furniture. We hear the phones ringing, and people typing and clicking furiously on their computers. We think we have the world by the tail, and we enjoy basking in the glow of our greatness. When that happens, slap yourself back to reality and go out and sell something.
Cashflow – Did I mention this was very important to watch?
Poor Communication With Team Members – Many small business owners love to work. They see the business as their baby, and spend many long hours tending carefully to it. If you have employed other team members, make sure they are included in your vision. If they buy in to your dream of what your business could become, they will be more excited about helping you get there. On the other hand, if you hide bad news from them (or worse – sweep personnel issues under the rug), you create a culture of deceit and drama. People will assume the worst, so be honest with them.
Inflexibility – While your business is young, you must be nimble. In most cases, the most volatile time in the life of a small business is the first few months. Keep the main thing the main thing, but be prepared to try different ways of doing things to make sure you ride the roller coaster and come out on the other side unscathed.
Cashflow – I just had to put it in again. Don’t neglect this!
If you have a good idea, pay close attention to these items, and keep your eyes on the goal, you have a solid chance of success. Don’t become one of the statistics. If you need some assistance in any of these areas, send me an email and we can discuss where you are and where you wish to be.
What are some other ways small businesses can ensure success? Let’s hear from you! Just click on “Comments” under the title.
