Small business owners are so brave.
According to the Small Business Administration (SBA), half of all new businesses survive the first five years and one-third of those survive 10 years or more. In the face of adversity, small business owners are bold and make the commitment anyway.
I could relay a bunch of statistics about how this country and its entrepreneurs are going down in flames, but there’s a positive spin: small businesses are kind of having a moment in 2015. A total of 47% of SMBs have more confidence in the economy than 12 months ago, according to the State of Small Business Report. Here’s some more good news: 57% of SMBs expect revenue growth this year.
While growth is a fantastic thing for the small business, there is still the underlying fact that many of these businesses won’t make it past the five year mark.
Here are three reasons your small business may not make it to 2020, and tips on how to stay on the positive side of the statistics.
You Don’t Stand Out from Your Competition
We are in the midst of a recovering economy, so the job market is still pretty tight. Many people have found it necessary to take the risk of opening a small business to find job security. With this entrepreneurial boom, the markets are becoming flooded with similar businesses.
It’s essential that small business owners figure out what makes them stand out from the pack. Assess your strengths and really play them up. This article from Entrepreneur has some awesome ideas for pulling away from the herd.
You Aren’t Really Communicating with Your Customers
Let’s get one thing straight: your customers are not going to tell you how to work with them. It is on you to create the type of service you think your customers deserve and then build systems to uphold that service. One action you can take to really know what’s going on in their heads is to actually communicate with them.
So many businesses see customer service as a set and forget it system, when it actually needs to be maintained and watered constantly. How do you connect? Use customer surveys. Personally reach out and ask customers what they think of your product. If you have a storefront, create connections by getting personal. When people feel they know you on a deeper level, they will be more open about their issues.
Failure to Land on a Successful Business Model
Yes – there are small businesses that opened their doors without so much as a single plan in place and have been successful. In addition to a lot of stressful problem solving and long nights the owner probably suffered, that person placed a lot of pressure on themselves without a solid business plan, or model, in place.
It’s your business model that really gives you scope on the big picture for your business; what you will do, the steps you will take to create success and, ultimately, make a profit. You can have the charm of 20 George Clooneys, be a customer service expert, and have a business that stands out. But if you don’t have profitability, you’re sunk.
Need some ideas to help you get started with your business model? Check out this article from Mashable.
Don’t become a negative statistic! With some proper planning, research and a dose of customer interaction, you could be well on your way to creating the business you dreamed of when you ran away from your cubicle.
Want more tips for your business? Check out our tips for superhero small businesses!