Ever notice how some small businesses seem to thrive under just about any economic conditions, while others constantly struggle and miss opportunities that come their way?
In part, in might be the type of business, the location, or financial backing.
But the most successful business owners display some clear patterns and habits.
When struggling entreprenauers were analyzed there were some findings that occurred regularly , there was a period or point in time when a decision was made or not made early enough that started a rapid spiral down in both motivation and more importantly resouces. Trying to make money in business is hard enough, never mind havng to take a large portion of profit out to pay off previous liabilities.
You see profit is the blood flow over every business, not enough and certain areas start starving for resources and ultimately hinder future performance.
Now most people would consider a business failure to be the cause of a misguided enthusiasm coupled with a poorly researched and planned idea. Interstingly, the data does not confirm this, in fact quite the opposite.
Yes, there are many people who have a dream to buy or own a business. Now who wouldn't want that, you're your own person, no one to answer to, you are top dog in the workplace and you'll need a wheelbarrow every Saturday to get all that moolah into the sagging boot of your car.
However, whilst it is correct that the majority of new start up ventures will never gain traction and will swindle down to nothing or the business owner just accepts his fate and takes his medicine, usually a bankruptcy, and a fight to keep hold of that family property you assured everyone would be fine.
No business failure is nice and no real entrepreneur will go through life without there fair share of failure and most who make it the top of the hill can tell the war stories they encountered on the way, as we all know it is tough, emotionally you are up and down like a yoyo and i'm yet to meet a small business owner who hasn't spent at least the occasional evening laying in bed with tired eyes but a head running around like a dog in the butchers shop. Things like "how can i pay that supplier tomorrow, I hope he comes after lunch etc.
Of course for every 8-9 failures , these are usually an result of 1 or combination of 3 things.
1) WOW Factor - Geez, we thought it would popular but wow. Right time, right product, right place.
2) Deep Pockets, Now if you can afford to pay the shop rent for a year or so even if no one walked in the door well that turns the tables, it becomes not so much as struggling to get a business to a critical mass point it is more on making sure you do not do anything to harm what is coming or will come in time.
3) The Grafter, these are the people who personally I really admire, not so much as they're the hardest workers, infact that flies in face ove basic management principle, My admiration is based on their tenacity to not give up and if that means working 20 hours a day to break even then so be it, to these people failure is not an option.
The area I want to discuss, is those small businesses that found growth, albeit at a steady consist level, they had operated for for between 2-3 years and began to become a brand rather than just a restaurant or shop.. This could be the couple who took over a restaurant, built it to a sustainable level and even started to leverage by expansion.
This is the point where I think that a lot of potential gold mines die a unfulfilled death, now lets go back to the start, the couple obviously had some skills and obviously people wanted what they were offering. So whst goes wrong.
Well with leverage, every up side has a down side so and just like the sharemarket, the more leveraged you with debt to asset ratios then the more vulnerable to market fluctuations. Cashfow id king in business so if you're not paying bills on time, never mind bein profitable your on a long hising to nothing.
1) Firtstly, without enoogh cash flow the only survival mode is contraction. If a business cant pay for the things it uses to operate on time, then how can you increase that risk by doubling order volumes. and attempt to increase revenue, improve margins and focus on eliminating areas that could e detrimental
other business owners make many of the same mistakes that are often avoidable, especially when it comes to growing a business. Part of the problem is short-term thinking – chasing the latest shiny advertising object that happens to pass by, for example. Or spending too much time seeking new customers and not enough taking care of the ones you have.
Solid, long-term growth starts with what I call “inside-out” thinking – doing the things inside your business that you can control, and paying less attention to the outside things you can’t control.
Here are 10 such “inside out” secrets for successful growth.
1. Change how you think about growth
Consider growth a constant – not something you switch on or off depending on conditions. For example, many business owners reduce offerings at the first sign of an economic storm, or overspend when the outlook seems rosy. But a steady-as-she-goes approach makes for long term success.
2. Check your ego; seek out sound advice
You know your business inside and out, but that doesn’t make you an expert at running every part of it. Smart business owners know what they don’t know. Don’t be afraid to ask for advice and then take it.
3. Remember your first fans
Many entrepreneurs seem to forget who helped them get started. If you have investors, keep them apprised of what’s going on. Good communication is critical. A good investor group can provide mentoring and other resources, so keep them involved.
4. Share your knowledge
In today’s social media driven world, success and influence are in the hands of those who share ideas and information. So when you’ve found a great tool or solution, or gained insight, tweet it, blog about it, author an article, post it to Facebook.
5. Hire help to watch your money
Lack of strong accounting and finance can be the only thing keeping you from reaching your financial goals. Find well qualified people who share your vision and then step back and take their advice.
6. Know when to persevere
Stick to your mission. Many would-be success stories end prematurely because they give up when challenges mount. Don’t let hurdles stop you. Arm yourself with market knowledge and an expert team and push through.
7. But recognize when to change direction
Still, there are times you may need to change direction or call it day, and having the courage to do so can be liberating. You may end up with a clearer picture of what will or won’t work.
8. Keep cash on hand
One of the biggest mistakes growing businesses make is to run out of cash. While the sun is still shining on your business or before your financial picture has a chance to turn sour, meet with lenders and/or landlords proactively to see if there are opportunities to restructure debt, payment terms, etc. Having cash on hand is critical for staying afloat and continuing to grow.
9. Get more when you have more
Don’t wait until cash balances get low to secure more funding. The best time to get more is when you don’t need it. Securing a line of credit while you still have money in the bank gives you the ability to negotiate a larger line and better terms. It also gives you the ability to make payroll during slow times and to have access to cash as needed. In addition, it gives you an opportunity to develop a business relationship with a bank.
10. Sell when you get the chance
Many business owners miss, or worse – pass up – incredible chances to sell their company because they are not prepared to adequately evaluate the opportunity. Know where you stand in the marketplace at all times. That includes what your potential is, and what it will take to reach your potential. That way, when opportunity knocks, you’ll know
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