Do you remember when you first started your business? How optimistic, inspired, free you felt. How motivated you were to do whatever it would take to achieve your dreams.
That’s why it’s so heartbreaking to hear that 8 of 10 small businesses fail. All those hopes and dreams gone!
We often see this when an independent shop opens up, all beautifully done, opening their doors with great expectations. Then as the days go by, you can see they have so few customers in there, you know that they can only last so long. Before you know it the shop is boarded up, waiting for someone else to take the chance. Very sad.
Why does this happen?
It seems obvious, since consistent cash flow really is the fuel that every business needs to survive yet shockingly research shows that 87% of business owners struggle with cash flow. These businesses struggle to maintain cash flow for a variety of reasons;
- Poor decisions on what to spend their money on and when
- Poor financial management
- Underestimation of the finance required to achieve growth wanted
- Over reliance on a few key customers and one of those customers experiencing their own cash flow difficulties.
Cashflow of course, is central to the whole business and is therefore also affected by other business problems such as:
- No market research to confirm there is an opportunity
- No clearly defined market (wrong location, too generic)
- Lacking differentiation against the competition
- Products or services not hitting the mark
- No lead generation system that leads to a steady flow of prospects
- Inability to convert prospects into clients due to a lack of sales ability in the business
- Capacity limitations leading to peaks and troughs in sales and delivery
- Struggles to recruit and retain good people
The list goes on…..
These challenges are not only happening in the businesses that have to ultimately shut down, it’s a constant battle with all small businesses from the outset and particularly prominent when there is ambition to grow.
It’s not easy and the way you handle these challenges is crucial to not only surviving but succeeding in bringing your vision to life.
It’s not all doom and gloom!
The good news is, it is absolutely possible to succeed in business. There are so many amazing small businesses out there that have managed to navigate through these challenges and build a solid rewarding business.
It’s all about the decisions you make along the way
In this day and age, working in and on their business can be overwhelming for small business leaders. It’s so fast paced, there is so much opportunity out there, so many options, so many things you could be doing, should be doing, would be doing, that many small business leaders end up reacting in the moment and making ill thought out decisions that don’t get the desired results. Or they spend their time hopping from one idea to another without giving enough time to see any initiatives start working and build momentum.
In order to make good decisions there needs to be a clear business strategy
“The essence of strategy is choosing what not to do.”
The challenge is about not only knowing what to do but what not to do. Being able to say “no” to things because you know you are on the right track, and make sound decisions that are aligned with your purpose is key to creating space and undertaking consistent action to get traction and forge forward.