There are many reasons small businesses fail. And, while some of them are unforeseen and unpreventable, most of these reasons are preventable. Here are some of the ways you can keep your small business from folding up.
Manage Your Finances
This is probably one of the biggest reasons businesses fail. The business owner has a great idea, but no financial literacy to back the business idea. Then, the owner proceeds to fail spectacularly when it comes to managing debt, paying bills, and so on. Opening a checking account with BB&T that is designated for business transactions only is a great way to manage your company’s finances and keep funds organized.
Get yourself good accounting software, or you’ll end up paying for the services of a good bankruptcy Attorney in Dayton Ohio.
Also, don’t be afraid to save money. Every business needs a cash reserve.
Be A Leader
It’s amazing how many businesses are a ship without a captain. Your business can, and probably will, fail if you have poor management skills. This is evident in many forms. You’ll struggle as a leader if you don’t have experience making management decisions, supervising your staff, or the vision to lead an organization.
Maybe your leadership team isn’t in agreement on how to run the business. Fine. You and your leaders should argue with one another in private, away from the staff. And, no one should contradict your message, because you are the boss. If you are undermined at the middle-management level, the company will start to crumble from within.
Dysfunctional leadership in business always trickles down from the top. It affects every aspect of your operation. It will confuse and demoralize the employees, and could eventually cause the business to fail. It affects the financial management of the company too.
Do whatever you have to to enhance your leadership skills and knowledge of the industry. Examine other businesses’ best practices and adopt them in your company.
Have Uniqueness And Bring Value
If you don’t have either of these things, you’re sunk. You may have a great product or service for which there is strong demand. But, your business is still failing. It might be your approach is mediocre. It might be you lack a strong value prop. Maybe the problem isn’t the demand but your competition. If there’s strong competition, you need to stand out in the crowd.
You can add value to your company by doing something different. You don’t necessarily have to be better, just different and wildly so. What are your competitors doing better than you? You can either compete with them, or pivot and do something unexpected and different — something they’re not doing.
Understand Your Customer
A lot of businesses have failed because they don’t understand the customer. Your business is no different. Your customers might like your product or understand that it’s what they need. But, if they’re giving you feedback and you ignore it, they will ignore you.
What are they telling you? Have you been listening? Is the market declining? Are they still interested in what you have to offer? These are important questions to answer.
Have A Profitable Business Model
A lot of businesses think they can operate on razor-thin margins. They can’t. It’s just like the leadership failure. You cannot run a business on no profit. You need to make sure that what you’re doing scales nicely and that you have enough money to reinvest in the business, cover your marketing costs, labor costs, and of course taxes.
Kieran Pope is a finance consultant who has, over the years, worked with both individuals on personal finances and small business owners. He likes to help people and stop them from making silly financial mistakes that could have been avoided.