According to the SBA, seven out of ten new employer establishments survive at least two years and 51 percent survive at least five years. This is very different from the reported 91% failure rate several years ago, but is almost 50% of small businesses closing within 5 years acceptable? No!
“51 percent of small businesses survive at least five years” – SBA –
I continue to see small and large businesses open their doors to a crowd of people. This is then followed by several months of steady decline and then closing their doors for good. Even if it lasts for years instead of months, it’s horrible to see businesses fail, but who’s fault is it? A lot of people blame government or huge businesses but this is most definitely pointing fingers and laying blame on the easy targets. Small business failure is too common and business owners need to take responsibility and do something about it.
Nearly every business has a decent enough product and has good pricing (most customers will pay more then it’s worth anyways). Beyond that, they are friendly to customers and don’t do anything illegal. Yet, businesses slowly fall into the giant whole of failure which can cripple their careers and person life.
There are a lot of little things that can cause a business to fail and I can’t name them all. But I commonly come across some major issues that I can’t not talk about. First, business owners think everyone knows about them and that people will just continue to come forever. “Build it and they will come” was created in a time when there was only a couple of shops in town and doesn’t hold up today.
Even though some business put out advertisements and talk to people about their business, no one knows they exist. Businesses need to get huge attention and keep it going. Just because a good start gets your business going doesn’t mean it will continue. Make a splash every day or at least every week. Be known by everyone in your community for what you do, and be the go to expert.
Easy ways to get noticed:
- Contact your local newspaper because they want to hear about new businesses and changes
- Go to free business events
- Use social media, its free and only takes a few minutes a week (Twitter, Facebook, Google +, Pinterest, LinkedIn)
- Donate time to organizations and charities
- Claim local listings
- Use flyers
- Contact and meet similar groups and businesses (host events for organizations)
Secondly, you need to always stay a step ahead. Expect that your buildings roof is going to collapse and needs repair or your current customers will leave never return. Losing customers
and huge expenses are going to happen so get ahead of it and prepare for the worst. This means better financial planning and getting more customers. One last note, continuing to learn about your specific niche will help you grow and evolve. Every area of business changes from restaurants to nail salons so read and learn!
Top business leaders read four to five books per month!
Its simple, continue to make sure everyone knows about your business and prepare for the worst. Beyond that, all I can say is stay motivated and go head first into your business.