Defined as a business with less than 100 employees, small businesses make up 99.7% of businesses in the United States. While it’s common to see small businesses pop up in your city from time to time, they often disappear just as quickly as they appear. In fact, about 50% of startup businesses fail within the first five years and no one desires to see this sign.
It’s no secret that small businesses play a significant role in the economic growth and development of local communities. But the percentage of small business failures can be discouraging to anyone seeking out a small business venture.
While there are several reasons small businesses fail, a few factors include being out-competed, not having the right team, running out of cash, and not having a market for products or services. Keep in mind – paying close attention to these same factors (and more) can be the same reasons that businesses thrive! Everything from employee hiring to use of technology can mean the difference in a successful or unsuccessful small business startup.
Whether you’re looking to revamp and rethink (or even start) your small business, it’s important to be knowledgeable of the common small business failures so you know where to put a little extra thought.
Here are a just a few tips to keep in mind when considering starting a small business:
Do Your Research
When deciding on your small business startup, it’s important to invest in the right idea. Research what kind of businesses work, or don’t work, in certain areas. While most profitable small businesses are a good place to start, always keep your area and, ultimately your customers, in mind. What product or service does your community need? Just because it’s profitable elsewhere does not necessarily mean there is a high demand for it in your community.
Communicate with Customers
Ensure you are targeting customers specific to your business. Utilize market research to figure out potential customers’ ages, genders, and income levels. Collect data using focus groups, online surveys through sites such as Facebook, or handout surveys. Use social networking to create an online community where you can personally engage in conversation as well as promote your business by sharing news or special offers. Here's a fantastic video from Kent Beuscher, founder of U.S. Press, a commercial printing company in Valdosta, on getting to know your customers.
Build the Right Team
Not only is it important to find the right members for your team, but it is just as important to consider how you plan to retain good employees. Learn more on how to keep your best employees here. You may also consider incorporating team building by partnering with a John Maxwell Executive Director to help your build your team by providing personal development and training to boost moral.
Invest in your team. Employees need to feel valued as well as considered members of a team. This can be achieved through benefits and team-building activities. When people feel a part of a team, studies show they have better sense of security and self esteem.
These tips are just a starting point, as there are several ins and outs to starting a small business. Through additional ample research and effort, however, you’ll be on your way to creating a successful small business idea and startup in your community.
Additional blog post can be found here.