Obtaining funds to start a new business or to expand an existing one can be a challenging and exciting experience. Before lenders and investors can commit to funding, they will want to know there is a high chance that your business will be successful.
Certain areas need to be addressed and prepared such as a coherent and comprehensive business plan that includes marketing strategies, financials, product or service offerings, competitor analysis, and short- and long-term growth strategies.
“My business is in trouble with debt spiraling out of control and I simply don’t have enough cash to make payments on time. I’ve read that most small business startups have problems similar to mine, but why?”
This concern is common amongst the directors, managers, and owners of small business startups in the UK, and for good reason – about 2/3 of startups fail within their first 3 years of operation. Usually the failure is brought about by a number of factors that work together synergistically to make business progression difficult. Here are the 4 most common reasons why small business startups don’t do well:
1. Inadequate PreparationStarting a successful startup is all about planning – analysing your market conditions and competition. Some of the things you’ll need to know and have planned for:
- Who is going to buy your product/service
- How many companies are providing similar offerings
- Why your company’s offerings will be more appealing
- How much your competition is charging
- What it will cost to get the business of the ground and start an advertising campaign
- How much the business will need to spend to operate on an ongoing basis
The economic recovery may be continuing, but small business owners aren’t ready to put the rose-colored glasses back on.
According to an exclusive CNNMoney-Manta survey released Tuesday, 28% of small business owners said the economy is the “biggest challenge” they’re currently facing, topping issues like sales, regulations and financing.
The survey polled over 1,500 small business owners across the country. Even those experiencing revenue growth are hesitant to test their luck. “We’ve done well as a small business, [and] banks are willing to lend us money,” said Victoria Aguilar, the founder of a small law and consulting firm. “But is it safe to bring on another employee?”
As I left our home and drove around the mountain, fog enveloped me quickly. Unexpectedly.
There was no sign of fog when I pulled out of our garage.
The business environment changes that quickly, also, particularly with what influences our customers’ and clients’ lives.
For example, the shooting down of the Malaysia airliner over the Ukraine suddenly dominates our conversations, news media, buying habits, and prayers. It fogs our perception.
So how do you do business when tragedy fogs over your business? Here are 3 Strategies to Work Positive in a Tragedy.
Managing cash flow is a challenge that many small business owners don’t realize can make or break a business, but streamlining the process is easier than you might think.
“Many great operators who understand their industry and how to deliver for the customers don’t have an understanding of what it takes to grow, maintain or create efficiencies in their operating cycle to empower their business,” said Quincy Miller, executive vice president and head of business and commercial enterprise banking sales at RBS Citizens Financial Group.
“Companies that have accelerated their receivables, streamlined their banking operations and established more-advantageous payment terms and processes with their vendors, suppliers and customers have a definite competitive advantage in today’s marketplace, no matter their business,” Miller said.
Are you doing the bare minimum when it comes to your small business website? Just having a website is no longer enough if it ever was. You’ve got to take action to get potential customers to discover, engage with and buy from your business. And that means creating an integrated online marketing plan where all parts of your Web presence work together.
Deluxe Corporation recently polled small business owners to find out what they’re doing online. Here’s some of what they found:
Small business owners say word-of-mouth is their most important way of engaging with customers 73 percent. However, they don’t seem to realize that social media has become a crucial part of word-of-mouth. Just 21 percent say social media is an important way to engage with customers; in comparison, 40 percent say business cards are.
What about websites? While two-thirds of small business owners have a business website, that number is still way too small. As I mentioned earlier, having a website is the bare minimum these days. Small business owners are also falling short in what features they have on their website. Fewer than half have photos or videos; just 32 percent use search engine optimization SEO, and only 28 percent have reviews or social media share/follow buttons.
Customer service should be a top priority for any company. Customers keep your business going, and making them happy is the best way to ensure that they’ll continue to come back. In today’s world of social media and 24/7 connectivity, it’s easier than ever to keep the lines of communication open between you and your customers.
“We live in an age when everyone is constantly connected to each other via the digital universe across email, Twitter, chat, etc.,” said John Joseph, co-founder of data solutions provider DataGravity. “Technology gives [businesses] the ability to correspond with customers more efficiently, and companies — especially startups — need to take advantage of the tools they have to communicate with customers.