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…
One: 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.
Two: 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.
Three: 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.
Four: 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…
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. You need help with details that you may have overlooked.