WHY DO SMALL BUSINESSES FAIL?

smallbusinessfailureThere are many reasons for the staggering failure rate of small businesses. Some consistently stand out more than others. Fortunately, for every weakness there is a cure. Improving upon these weaknesses, recommending solutions, and mentoring small business owners is a major role for a small business consultant.

These small business weaknesses include:

1. Basic Knowledge – While many small business owners know the technical aspects of their businesses very well, they lack the basic knowledge in all core functions necessary to operate a business through the various organizational life cycles. It is this wide diversity of knowledge that is necessary for survival, success, and growth.

2. Internal Strengths and Weaknesses – Small business owners must know how their businesses fit into the competitive landscape in which they operate. A business cannot improve if the owner does not understand its internal strengths and weaknesses. Without this knowledge, it is also difficult to ascertain market opportunities or recognize external threats that might hinder a business.

3. Finances – Cash is king in a small business, but many small businesses operate day-to-day simply hoping for better results tomorrow. A business owner must know what products or services bring in the most profit (dollars and percentages), what expenses are out of line, and whether the business will be cash flow positive in the future. A general lack of business finances and poor cash management is a partnership for disaster.

4. Lack of Planning – Planning is important for any business regardless of size. Small businesses must establish growth objectives that include operations, sales, marketing, employees, etc. Planning creates a proactive rather than a reactive environment in a business.

5. Customers – Many small business owners are so swamped with work that they never take the time to “step into the shoes” of their customers to see and experience their business from another vantage point. It is important for a business owner to understand what customers like and dislike about the business, how the competition differs, or what the customers desire most when dealing with the business.

6. Little Things – Little things in a business mean big things to employees, customers, vendors, bankers, and other business relationships. The lack of detail and follow-up, especially when dealing with customers, will always result in a lack of customer service and retention, which is not a recipe for business growth.

If you can identify with any of these items, we can help you. Why not let a small business consultant work with you to achieve success for your small business? Call our office today at (727) 391-7373.

Reference:

Weinberger, R. (2014). Small Business Weaknesses. Retrieved from http://www.aasbc.com/blog/post/small-business-weaknesses

As a CPA, Accredited Small Business Consultant, and Advanced Certified QuickBooks ProAdvisor, we mentor small business owners to empower them with the knowledge and skills to run a successful business. Allow us to evaluate your small business needs. Give us a call today at (727) 391-7373 or visit us at http://www.LStortzCPA.com and http://www.tampabayaccountingservices.com

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