The term “dog eat dog” is a gross understatement when applied to small businesses. A mind-blowing 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 discover that it really is the life force that drives a capitalist environment. Excessive greed aside, small businesses are a staple of any strong economy, and more must be done to ensure they don’t fail. But, they fail, and in no particular order, the Top 5 Reasons Small Businesses Sometimes Don’t Make It…
One: No niche is a bad niche. Some companies have trouble developing a customer base. These “niche” markets are essential to the success of any business, large or small, and whether you have an online business or a physical institution, having a niche customer is important. A niche must be catered for. For example, if you are hoping to attract the emo/goth crowd with your clothing store, then having sporadic racks of I-Love-Hippies clothing will not work. A niche of any kind allows a small business to compete with a large company. Your niche will ultimately choose your business, but it is up to the business owner to go after the niche.
Two: Search for loot in all the wrong places. If you just started a business solely for money, then it will probably fail. “Because you ask. It’s because he’s only concerned with profit: he’ll cut corners and do whatever it takes to make money. Conversely, if he started a small business for other reasons, say, a small sandwich shop because he loves to make sandwiches, more will be invested in your business and money is not the 500 pound elephant.
Three: find the right location. In high school business class we are taught that location is the key to success. The right location is essential and therefore the wrong location is business killer number three. You have to set up a store where the customers are; where traffic and accessibility are minor concerns; where you are not in tough competition with other companies; where you can target your niche and hopefully brand your business in the early stages.
Four: The leap of faith. You may think that your heart is in the right place, but faith and thought are two separate things. A great deal of planning must go into your business. It is essential to have a plan from day one. If not, you can say goodbye to that business before the grand opening. Consider a team to help you plan every conceivable detail, which brings us to number five…
Five: Put an I in “team.” Don’t start a business alone, that is, unless you crave failure. Assemble a team of people, who don’t necessarily have to be bought and paid professionals, to help you through 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 you may have missed, and in most cases other people offer different perspectives that can be interesting avenues to pursue.
