Most people have heard the common statistic that “most businesses fail within the first five years.” So, what is it that makes this stand true? The last thing on any small business owner’s mind is failure when they start their business. Yet somehow, as much as 20% of all small businesses that start this year will fail within a few years.
Despite these grim statistics, knowledge is power. By equipping yourself with the right information, you can reduce your chances of it happening to your business. Here are the top five reasons why small businesses fail and what you can do to avoid them from happening to you.
No Online Presence
It’s as simple as this: if you have a business in today’s world, you need to have an online presence. In addition to having a professionally created website and social media account where you can interact with clients, you should also be dabbling in increasing your visibility on Google search results. As a small business, it can be challenging to stand out amongst a sea of competition; therefore, you need all the help you can get to stand out as a local small business.
If you’re unfamiliar with search engine optimization, then take a look at this website as a guide to optimizing for local SEO.
A lack of sufficient leadership is one of the most common reasons for business failure. Hiring a manager with insufficient experience or inability to prioritize and delegate is a quick recipe for failure.
Small business owners should make sure they hire an expert or become an expert themselves before diving in. A business needs a strong manager who creates a productive work environment and trains their employees thoroughly. They must be as committed to the success of the business as the owner and willing to put in overtime to ensure success.
Before starting a business, you need to have a specific plan mapped out for the future. You should have everything covered from your short term to long term goals as well as how you plan on financing your company.
A business should know exactly how it’s planning on budgeting for their goals and whether they plan on expanding at some point. Improvising as you go isn’t an option if you hope to weather the storm.
Moving Too Quickly
A lot of businesses experience early success and expand their company too quickly. They start to rapidly open more and more locations only to find that they’re in over their head. A smart business owner knows that rapid growth can be dangerous. A slow and steady approach is the best way to avoid bankruptcy and reach success.