By Chris Smith
These days it seems to be the norm to read about the success of small businesses that are paving the way in one thing, or changing the game for another thing. Not so often do you read about the small businesses that are struggling – the little guys who lady luck has forgot to touch.
While some may argue that luck is an important thing in these endeavours, it’s important to remember that you shouldn’t need luck if you’re running your business properly, effectively and productively.
The reasons a business fails differ from case to case, but there are some reasons that will nine times out of ten be a part of the reason a business is indeed failing. By recognising that any of them is a problem you are facing, and by knowing the correct way to combat each, you stand a better chance of turning things around than you would by just continuing on the way you are.
Your business plan
It’s likely that you have some sort of business plan in place. If you don’t, then you can safely assume that this is a big reason behind your lack of success. You need to know what you are doing, where you are going and what direction you need to be heading in. While your existing business plan might tell you these, the fact that you are struggling to find success suggests that your plan might need some tinkering.
Are you hitting your goals? Are you meeting your time and cost projections? These might sound obvious, but if you aren’t completing these actions successfully, then you will seriously need to sit down and rewrite your business plan and vision. Even just setting some more feasible goals can change everything. If you’re hitting your targets and you’re heading in a better direction than you were before, then confidence and morale is going to increase. Always be realistic with your business plan.
It can be assumed that if your business isn’t going the way you would like it to, then your finances aren’t either. You need to take a good hard look at where you are wasting money. However, this shouldn’t be mistaken for unnecessary cost cutting. You need to spend where you need to spend. If you’ve got debt in the form of business loans or credit lines, it might be prudent to look at consolidating to make sure your finances are under control. However, be sure that you fully understand debt consolidation first to make sure it’s the right move.
While you need to make sure that you’re not spending in the wrong places, you also need to make sure you’re spending enough in the right places. Looking at spending more in areas that are working for you is another step you should consider. This could see a better return for you in certain areas, and it can also help with the aforementioned reworking of your business plan.
Learn from example
Obviously it’s important to keep an eye on every detail of your business; something that can help you out is by looking at other businesses. You should already know the leaders in your niche or sector (another part of a good business plan) so now investigate what makes them successful. Identify where they went right, and figure out how you can implement that to your own strategy. There might not be anything immediately actionable, but it will at least give you an idea of what you can try.
Check out their websites, or their blogs, or even their social media feeds. Find out what they are up to – it won’t give you their business plan by any means, but it will give you a feel of how they go about things and perhaps how they approach certain scenarios.
What you can also do is look at businesses that have failed. For everyone business out there that has been successful, there are a lot more who haven’t. However, don’t let this act as a deterrent, but as a guide of what not to do.
Evaluate the people you work with
While it might seem that this section is only applicable to those of you that have a staff, it definitely isn’t. If you do have a staff, then this is where you need to start. If you have even the slightest inkling that someone isn’t working out, then you need to deal with them. This is your livelihood on the line here. In an ideal world, there would be room for sentiment, but this isn’t an ideal world. Even if your staff are friends or even family, you need to know when to draw the line. As sinister as this sounds, it’s something that you can’t afford to overlook.
And it’s not just your staff – suppliers, outsourced workers, lawyers, bankers – the list goes on. A business is a metaphorical machine, and if there is a part of your machine that is causing it to work less efficiently or even not at all, then that part either needs repaired or replaced. Efficiently managing your employees is vital to your business.
Keep on top of technology
With the advancements in technology, it can’t be stressed enough how important it is to keep up to date on technological trends that is relevant to your sector or niche. If you don’t, then, simply put, you are going to be left behind. Advancements in technology have presented small business owners with opportunities to become a far more effective force in their market at what is essentially a low cost.
Research tools and assets that you think could benefit your company; understand what they do and how you could use them to your advantage. It might be marketing software or it might be something more fundamental such as invoicing software. The point is that there is going to be something out there that can help you, and you have to assume that your competitors are going to be using it.
By keeping on top of this, you can make sure you’re not one step ahead necessarily, but definitely not left behind. If you’ve identified where your business needs to change, then look to see if there is something out there that can help you make this change. Chances are that there is going to be something there.
About the author: My name is Chris and I manage the Spend It Like Beckham blog where you can find everything to do with sports and finance. When I’m not writing on there, I’m spreading the good word far and wide for wherever will take me, covering subjects such as business, students and technology. You can also find me on Facebook and Twitter.