Kyle's Blog
ICC Explained
While thinking about failure is one of the last things you want to do as you start a company, the reasons that half of the new small businesses fail within the first four years can help you succeed! In no particular order, the top 10 reasons for small business failure are:
Bad Financial Planning. When you wrote your business plan, and got the cash to get the business started, you had a plan. You should go back to your financials and project based on reality how much money is coming in and going out to help you develop a strategy to make sure you don’t run short of cash. Start with realistic but precise goals for your firm, including deadlines. For example, don't just say that you want to increase sales; instead, decide that you want sales to reach $100,000 by next holiday season. Then write down the steps you can take to meet those goals on time, and set deadlines for completing those steps. Consult your goal list every day, and make sure you are doing what you need to do to meet your objectives.
Procrastination. Tasks and paperwork can quickly stack up. Putting them off until you “have time” to deal with them will eventually overwhelm you. It is like a bad debt that won’t go away.
Excessive Overhead. Hire only employees who are essential to your operation. When you do hire employees, make sure they're well trained and able to complete the tasks expected of them. And remember that happy employees make good workers — try to create a work environment that keeps your staff happy and motivated.
Ignoring the competition. Gone are the days of consumer loyalty. Today, the customer searches for the best products/services for the lowest price even if that means breaking off a long-term business engagement. You should devote time to monitoring the competition and changing your company so they are watching you. Always be on the alert for new methods, products, or services.
Bad marketing. Very few products will sell themselves. If you don’t’ have effective marketing you may as well not make the product. Make sure you have the money to invest in a qualified professional to help you.
Bad Customer Service. Once you have a customer, don’t ignore them. You will have to work hard to keep them happy. Work on ways to improve customer service and always follow through. If you don’t’ they will find someone who will even if the product is not as good as what you offer.
Lack of versatility. You might be really good at one thing but if you can’t expand what you do you will shut yourself out of the market. Look at different markets and services for your products and continually look for new products so you are the victim of the product demand bell curve.
Location, location, location. They have all heard it and it is true. you're scouting a location for your business, consider factors such as traffic (how many potential customers pass your business during the course of an afternoon or evening?) and convenience (how hard is it for your regular customers to get to your location on a regular basis?).
A closed mind. Always keep you mind open to new ideas and ways of doing things. Stay on top of the game – talk to people who know more than you, read books, magazines, and web sites, and visit businesses who can help you network with your peers in the business community.
Unrealistic valuation. If you think your company is worth more than it really is, you will never be able to attract investors.