I have just read Jay Goltz’ Top 10 Reasons Small Businesses Fail, and I am inspired to share you the tips for small business to thrive, instead of talking about what causes small businesses to fail.
Jay mentions that small business owners tend to blame others – the government, the business partner, the bank, etc. – instead of themselves for their small business failures. The fact is that the majority of the blame is on the owners themselves.
In order to succeed, small business owners must stop pointing fingers to others and start sparking positive changes from the inside.
Here are 10 tips – inspired by Jay’s article – to help your small business to thrive in 2011 (and beyond):
1. Write a business plan (it’s a must!)
Many small businesses fail because of lack of proper planning and market research. Starting up a business to directly compete head-to-head with the big guys while hoping everything will be just fine is obviously a reckless decision making. Plan ahead, and target a niche untouched by the big guys.
2. Delegate, delegate, delegate
Your small business is not you. Unfortunately, many don’t think that way – many want total control of their business, eager to wear many hats for many reasons: The feeling of insecurity, not trusting anybody, etc.
You might be the pioneer, but you can make mistakes; delegating allows others to fix that mistakes of yours and actually better your small business. Two minds are better than one – that is the way successful business works.
3. Find the right balance between expanding and strengthening your business
Business expansion is good, but over-expansion will leave your existing business to be “brittle.” You need to allocate the right amount of resources, not focusing on one, while neglecting the other.
I was the owner of two franchise units, and no matter how hard I tried to convince my franchisor not to expand too quickly, the franchise expands aggressively. The end result: 20 percent of franchisees closed down their stores (this includes me.) Ouch.
4. Take a good care of your small business accounting
Employ the right Accounting staff; use the right accounting software; or if you are a solo entrepreneur, you need to record everything about anything happen in your business. Detailed numbers can help you better your business, as well as hindering you from financial issues, such as taxes.
My suggestion: If you hate the numbers, highly consider to outsource your accounting needs or hiring an accounting-savvy staff – the bottom line is that taking a good care of your accounting is a must.
5. Always have cash ready for your business operational
A rule of thumb in preparing a business startup initial investment: Always double that amount, and keep the other half as a cash reserve for your small business’ rainy days: Lawsuits, natural disasters, etc.
6. Raise up your bar – make mediocrity an enemy
Being mediocre will make your small business a so-so business. Being average is not enough; you need to be great – because if you don’t, your competitor will, and all of a sudden, your small business is being left behind, eating the dust.
7. Reduce unnecessary operational expenses – as always
You need to find ways to reduce overheads – stop paying too much for rents/leases, electricity, wages/salaries, and start looking for suggestions on how to reduce business expenses.
8. Fill your management team with the right person
Trouble makers, “yes-men,” and unhappy employees won’t do you any good. You need to team up with people that complement with each other perfectly. Conflicts are inevitable and often necessary for your business purpose, but having conflicts with problematic team members are time wasting and counter-productive.
9. Write a succession plan
You should start a business with an end in mind; what’s your exit strategy? Will you sell your business? Will you pass the ball to your kids or let your business to be professionally managed by non-relative people?
10. When all of the above fail – quit the business
Sometimes, the best way to be successful is by taking a step back, retreat to fight another day: Sell or close down your business. The proceeds can be used to finance the startup of a more lucrative business opportunity. Please bear in mind, working hard to keep a declining business afloat will drag everything down to the gutter, including your personal life.
There you go – if you have more tips, please share with us by commenting on this article.
Small business success