Success Secrets of Small Business OwnersBusiness Loans & Credit
Some small businesses succeed, often beyond imagination and some fail soon after starting. Big businesses and multinationals have different operating models and their success factors could be somewhat different than small businesses.
Have you ever observed a business carefully and tried to discover what are the success factors of small and medium businesses?
Why Small Businesses Fail?
If you investigate any business, you will soon discover that, no matter what the odds are, some succeed, while others go bust pretty soon even if they begin very promisingly. Businesses usually fail for one of the following reasons.
- Management and entrepreneurial factors – incompetent management, bad people skills and human resource management, lack of proper marketing, not securing regular and sufficient cash flow, wrong resourcing, wrong business strategy, wrong business model for chosen industry, success goes to the entrepreneur’s head etc.
- Legal environmental and socio-economical factors – if government enacts laws to forbid certain previously legal activities or require stricter permits for providing services or if the business activity is illegal in the first place e.g. selling marijuana at a café or combining sex with massage etc., then the business might fail. Some businesses also fail because their products or services are not relevant anymore.
- Market situation factor – in an economic downturn many businesses, which depend on people’s excess spending power fail, as there are simply not enough customers to guarantee regular cash flow. If the demand for your products/services fails to generate enough income to cover costs or if you cannot differentiate from the competitors or match their quality or lower prices, your business will eventually fail.
How Do Small Businesses Continue to Succeed?
Here is how successful businesses avoid failure and succeed in business.
1. Listen carefully. But, never act on any advice without first investigating it thoroughly
If you don’t want to listen, you’re probably doing something very inappropriate to the situation. No matter where you get the advice, check and double check to verify if it is relevant to your particular case. Adapt it to suit your personality, business history, business model, and other factors involved.
2. Take good care of yourself
Neglect your health, feelings, motivation and energy level and you’ll soon end up in ruins. Eat healthy and exercise regularly. Take short breaks in a day and your efficiency will improve. Vacations and time spent with family and friends doing different things will make you more alert and agile at work. Constant stress makes you irritated always and the quality of your decisions and work falls below the unacceptable level. Your troubles multiply when customers notice your stress and worries.
3. Drink a lot at work – only water and fruit juices. Never drink alcohol at work and limit coffee or other stimulants.
Using alcohol to drown problems is a recipe for disaster. Having parties with friends, family and customers is great and often vital for success but drinking alcohol alone, especially at work is a telltale sign of trouble. If you need twenty cups of coffee in a day just to keep going, there is something really wrong too.
4. Make sure that everyone sees you as positive - Never moan or spread negativity
People like to deal with positive people. The saying by the poet Ella Wheeler Wilcox, “Laugh, and the world laughs with you; weep, and you weep alone” shows how others reacts to how you can balance optimism and good cheer with ability to deal with negative emotions. When a customer or a partner starts moaning, just acknowledge, sympathise and try to find a way to help if they are willing to listen. Make sure that the interaction with you leaves a positive aftertaste.
5. Ensure regular cash-flow
Cash flow is the lifeblood of a business. But, all businesses have cash flow problems every now and then. Take it as a sign for rethinking, changing processes, adapting marketing strategies, product and pricing strategies and approaches.
6. Take prompt action, after careful consideration
Listen to everyone involved, view your options and then plan and decide on a timetable for action. Make sure everyone knows clearly who will do what, when and how. Follow up regularly on actions promised and taken.
7. Review the overall strategy regularly
Business owners, who drift from one crisis to another, seldom manage to capitalise on new opportunities. So, make sure to pause occasionally and look at the big picture and ask the right questions. Attend seminars and use the Internet to get information and update your skills. Read about how others are handling issues and succeeding. Adopt positive role models. Think regularly what inspires you.
8. Pay Attention to Your Family and Friends
If you want to find out what factors affect your business income, here's an article to help you identify income affecting factors.
Your business is your livelihood but you also need other life areas to balance. If you don’t involve your near ones in your life, you may become isolated with your business problems. You can build a new business after one sinks, but it may not be so easy with family and friends.
Wish you all success in your business!