Perhaps you know these statistics…that 90% of start-up businesses fail and that 8 out of 10 small businesses fail. So why did you start your business? Well, perhaps it was your passion for what you do. At Lenity Financial, we started our business (Mark & Lisa Bova Co-Founders) because we saw a need for compassionate as well as pragmatic financial advice.
The challenges that face small business are vast. Government regulations have stifled small business. The tax code alone costs small business 206% more than it does larger companies to comply because of its complexity, and small business lacks the staff for guidance, forcing owners to spend less time on growth. Also, we’re in a marketplace where technology can lower the barrier to entry. A new business can quickly set up online with little cost. However at the same time, people are expecting high touch customer service.
So, what are the commonalities among small businesses that fail?
- Being too confident without investing in the resources to protect your business Get that legal or accounting, financial or technology person who is the expert and can help make those decisions you need to make for your company.
- Having passion alone Passion is vital. It’s the energy that keeps you going and drives your growth. But, you also need to have a good understanding of the business fundamentals and really know what it’s going to take to grow a business.
- Delivering your product or service as you always have and the same as everyone else Those who deliver it just a little bit differently have the edge, differentiating their business. Always look for the missing piece in the marketplace and add it to your business to grow.
What are the keys to the most successful small businesses?
- Great hiring and retention Many small businesses hire well but simply can’t retain. Know your core values for your business and share them with your employees regularly. Your benefits are important as well. Do you have a high deductible health insurance plan coupled with an HSA account? A retirement plan for employees to participate in? Do you know what’s available out there and the costs?
- Profits Well of course! But how? Remember, innovate and optimize constantly and stay one step ahead of your competitors.
- Manage Cash Flows How? Better budgeting and invoicing. Not sure? Get a financial partner or coach to assist here, it’s important!
- Grow Revenues According to Jim Keenan, renowned sales expert, it comes down to 4 things: strategy, structure, people and process.
- Avoid Client Dependence You have to diversify your client base. No single client should be so significant in revenue generation that if they left, your business would be dramatically impacted.
We too at Lenity Financial are small business owners. We’ve had a few decades of experience focused on working with the small to mid-sized business owner and know the importance of consistently reviewing some of the ideas we’ve shared. Best wishes for a successful 2017!
Sources: Susan Solovic, The Small Business Expert
Jim Keenan, CEO,President of A Sales Guy, Inc.
Neil Patel, Contributor, Forbes – Entrepreneur