 |
Starting a Business - 10 Reasons Why Small Businesses Fail to Thrive
Author: Bonita L Richter  | Posted: 10-03-2008 | Comments: 0 | Views: 9 | Rating: (54)  (?) 
Kathy, a skilled massage therapist, called me to discuss what she needed to know to start her own massage therapy clinic. She had been in the industry for over ten years, and was very skilled at working with her clients.
She worked for another clinic and felt she was ready to start a business of her own. However, like many want-to-be entrepreneurs, she possessed the technical skillsmassage therapybut possessed little business management experience, and no self-employment experience.
For many want-to-be entrepreneurs, discovering why businesses fail is a smart research project. It helps to uncover personal weaknesses, as well as begin to build up inherent strengths before investing in becoming self-employed.
It also helps them better understand the dynamics of the industry they will be competing. For example, if competition is intense because of a large number of massage therapists in a geographic area, we can expect that there will be less market share per clinic, downward price pressure, and lower profit potential; this makes for difficult going, especially in the start-up phase of the business.
Following are 10 reasons why small businesses fail to thrive. If you have an existing business, it might help to determine why your business is not growing.
1. Mistaking a business for a hobby. Just because you love something does not mean you can successfully convert it into a business. Too often we feel others share our passion, and we bank starting a new business on it. Research your business idea and make sure it is viable.
2. Poor planning. Yes, you must have a business plan. It can be a 3-page plan for the simplest of businesses or a 40+-page plan for a more complex business opportunity. The point is you are prepared to focus on your business' goals and vision, and you have a good idea of what you need to do to put your plan into action. By going through a business planning exercise, you also may have unearthed what problems may arise, and how you are going to handle them, if they do. In addition, financially can you launch the business? It takes a lot of time to build a business; 60% of business start-ups fail within six months after opening. Lack of cash flow and undercapitalization is the culprit.
3. Entrepreneurial excitement. Entrepreneurs often get excited about new ideas, but are unable to determine if they have a "true opportunity". Part of an effective business strategy (here is the business plan, again) is determining which markets you will and will not serve, as well as what products you will or will not offer. Before deciding to undertake a new business activity ask yourself, "Do I have the time and skill to implement this?"
4. Risking everything on one endeavor. Too often, small business owners will have just one product, one service, or one big client. However, what if this one thing disappears? Diversification will allow you to ride the flow of ebbs and tides in business.
5. Poor record keeping and financial controls. You must review your revenue and expense records each month, and understand what they mean! Accounting is the language of business. If you do not know how to speak it, get help from someone who does.
6. Poor cash management. A good rule of thumb is that you can live for one to two years without income when getting started because new businesses are usually slow to get off the ground. If you have created a business plan with a realistic budget, you will already have determined what I have just written!
If your plan shows you earning a high income in the first six months, it may be a good idea to go back and review your budgets.
7. Poor time management. Putting off tasks you do not enjoy will sink your business fast! We get into a business because we love massage therapy. However, have we thought about all the other things that go along with running a business, like bookkeeping, banking, sales, and marketing activities, talking with accountants, attorneys, dealing with customer problems, collecting receivables, and slow cash flow? Getting help with administrative tasks that eat up your time is a sure-fire way to spend time doing what you do bestdeveloping new ideas and revenue for your business.
8. Ineffective marketing. Learn the basics of marketing and track the success or failure of each technique you use. Dump ones that are not working for you in three months time.
9. Ineffective sales techniques. Once you have generated interest in a client, how are you going to convert them into a sale? Understand the basics of selling; take a class, read a book; get some professional help.
10. Entrepreneurial burnout. Owning your own business requires a huge investment of time, money, energy, and emotion. Are you ready to ride the rollercoaster of the highs and lows associated with each of these items? I can guarantee you, it will happen! Motivation and creativity can suffer in the most challenging times, and a pessimistic attitude may prevail.
Be sure to schedule time for yourself. Take time off from your business. It will help you manage the ups and downs of entrepreneurship, and give you fresh perspectives.
As Kathy and I ended our counseling session, she made a list of areas where she needed to grow, and created a task plan. With planning and an objective look at both your personal and your business' strengths and weaknesses, you can be successful.
© 2006, 2008. Bonita Richter and Profit Strategies. All rights reserved.
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Source: http://www.articlesbase.com/business-articles/starting-a-business-10-reasons-why-small-businesses-fail-to-thrive-355185.html
About the Author:
Bonita L. Richter, MBA, founder of Profit Strategies, teaches entrepreneurs and business owners how to start and grow businesses, attract more clients, and market their businesses to increase sales, business success, and generate wealth. For FREE tips on how to craft the successful business you desire, visit Profit Strategies.
|
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free! |
|
Related Articles
Five Nagging Start-up Questions Facing Small Business Owners
By: Susan L Reid | 15/10/2007 | Small Business
Starting a business from scratch is intensely creative, exciting, & adventurous. As a small business start-up coach & consultant, I’ve noticed my clients tend to struggle with similar issues. Here are 5 nagging questions they most often deal with:
1. Is my idea good enough?
2. How do I obtain the money to start up?
3. Can I run a successful business & still have a life?
4. Do I have the necessary education & experience?
5. What if I fail?
Don't let these questions stop you!
Five Nagging Start-up Questions Facing Small Business Owners
By: Susan L Reid | 15/10/2007 | Business
Starting a business from scratch is intensely creative, exciting, & adventurous. As a small business start-up coach & consultant, I
The Secret to Building your Business From the Inside Out
By: Susan L. Reid | 01/11/2007 | Small Business
Have you ever wondered about the secret for building business success? Mission statements, business plans, and a product or service are important, as are funding, a support system and business sense. Still, you may not have the key, which is to build your business from the inside out. From a place inside that you intuitively understand. From your Inner Samurai comes the knowing that gives you the strength you will need to build your business.
Recession-proof your Business?
By: Todd Jensen | 13/02/2008 | Business
You can still grow your business even in a recessionary economy.
Five Characteristics of Great Business Names and Five Popular Trends to Avoid
By: Susan L Reid | 16/11/2007 | Business
Deciding on a name is one of the most exciting parts of starting up a business. The problem with choosing your business name is that so much rides on your choice. It's like choosing a name for your baby. Selecting a great business name takes time and thought. Getting it wrong could spell disaster. Getting it right can save you thousands. The key is making your business name memorable. Your name should reflect your market niche and identity.
I Own My Own Business, and I Work Hard
By: Todd Jensen | 21/12/2007 | Business
The key to running a business is to learn how to work smart not hard.
Five Characteristics of Great Business Names and Five Popular Trends to Avoid
By: Susan L. Reid | 16/11/2007 | Branding
Deciding on a name is one of the most exciting parts of starting up a business. The problem with choosing your business name is that so much rides on your choice. It’s like choosing a name for your baby. Selecting a great business name takes time and thought. Getting it wrong could spell disaster. Getting it right can save you thousands of marketing dollars. The key is to make your business name memorable. Make it distinctive. Your name should reflect your market niche and identity.
Time: Friend or Foe to a New Business Start-up? Make Time Your Ally When Starting a New Business
By: Aurora Anderson | 03/05/2008 | Small Business
What’s the truth about new business failure rates? If you have considered starting your own business or are in the process of making that leap, you probably have heard that half of all businesses fail in their first year of operation. The latest statistics released from the Small Business Administration indicate somewhat better odds: two-thirds of all new businesses survive at least two years, and 44 percent survive at least four years.
Got a Question? Ask.
Ask the community a question about this article:
Q&A Powered by: 
Latest Business Articles
Tips When You Strive to Buy Graphics Software
By: Bei M. | 21/08/2008
If you are regularly doing imaging and image-editing tasks in your computer, there is no doubt you are in need of an appropriate and functional graphics software program. That is why, you should aim to find and buy graphics software that would surely be of great use for you. However,...
Getting to Know More About Microsoft Business Software
By: Bei M. | 21/08/2008
There is no denying that currently, Microsoft Corporation is the world's biggest and most popular developer, designer, and maker of the most reliable computer programs and applications. Since its launch and the initial introduction of its first software, the company has never left the focus and minds of computer owners....
Develop a Better Business Model Faster by Analyzing Past Performance as Though These Were New Tests
By: Donald Mitchell | 21/08/2008
Past successes and failures show clues concerning opportunities and hurdles for creating superior business models. Learn from those experiences.
Secret Wholesale List Suppliers: Exposed!
By: Joaquin Reveron | 20/08/2008
You have a business. You need a wholesale list source to expand your product line and surely for possibilities of profiting more from the acquirement of wholesale products from such suppliers. Precisely, one of the easiest ways to get a source contact list of distributors and wholesalers is by hitting...
Wholesale Video Games: Extreme Infamous Tactics!
By: Joaquin Reveron | 20/08/2008
Let say that you have a successful wholesale video games accessory and your back up is your affiliated company that offers DVDs. Pay attention, this is one of the tools many of us on the top use to beat many competitors, make competitors paralyzed and not even make them think...
6 Reasons to Start a Drop Ship Baby Gift Ecommerce Business
By: Stuart Sherm | 20/08/2008
Starting any Ecommerce business is a daunting task, but here are some ideas where you can make money, have virtually no overhead and never leave your home. What you need is to join a great drop ship gift program.
Essentially you are aware that when you buy certain gifts online they...
Why Not to Start a Wholesale Video Games Business!
By: Joaquin Reveron | 20/08/2008
Many people tell you how lovely it is to start a home business, how magnificent it really of having more time with their family, kids, friends and plainly and enjoying what life has to offer with the extra time from a home office. It is true, it is fascinating,...
Do You Really Need a Job or Feel Maximum Incommodity?
By: Joaquin Reveron | 20/08/2008
Noting that many of our culture and society dislikes incommodity, incommodity according to most dictionaries is defined as inconvenient. Generally incommodity is logically and truly defined as something that causes that causes difficulty, trouble, or lack of ease. Society is indeed correct when it comes to its definition, however, you...
More from Bonita L Richter
Double Your Income - How to Create an Electrifying Money Goal
By: Bonita L Richter | 15/08/2008 | Internet
Would you like to double your income in the next year? If you're like most solo entrepreneurs, the thought sounds attractive. But, then things start getting fuzzy about how you're going to do that. In this article, learn about a 4-step strategy that'll help you create the energy you need to take action, and double your income faster, and easier than you ever thought was possible!
Email Marketing: 5 Simple Tips How to Craft Killer Headlines That *boost* Email Open Rates, Opt-ins
By: Bonita L Richter | 19/07/2008 | Internet
Email marketing is a fabulous way to market your products and services to your readers and make sales---*if* they bother to open your emails to read them! Your first impression--your headline--can lead to marketing success or failure. Read about five simple headline tips and formulas you can use to *boost* your email open rates, opt-ins, and make more sales!
How to Magnetize Your Target Market!
By: Bonita L Richter | 16/07/2008 | Internet
Discover the golden egg when you find out who is your Ideal Client---one that will be attracted to your unique personal brand and style. Shift your focus to include both "inner" and "outer" worlds, and naturally attract more clients and income into your business!
Increase Income - 7 Quick Tips How to Prioritize and Tame Those Ideas Spinning Around Your Brain
By: Bonita L Richter | 29/06/2008 | Business
Do you have a many ideas spinning around in your brain, and you're not sure which ones to act on first? This is a common blessing us creative entrepreneurs have; but it can drive use crazy, too, because we know we can't act on all of our ideas at once. Read this article for some quick tips about how to prioritize your odeas, and gain access to a useful worksheet tool.
Selling Online - 5 Simple Steps to Driving the Right Traffic to Your Website
By: Bonita L Richter | 10/06/2008 | Internet
One of the biggest challenges businesses have with their online strategies is how to get enough quality visitors to their websites. There are hundreds of ways you can drive the right kind of traffic to your website, and usually a combination of several tactics brings the best kind of visitor to your site. Learn about 5 simple steps you can follow to start driving more traffic to your website today!
Press Release: Discover 5 Crucial Tips to Get Powerful PR Now!
By: Bonita L Richter | 28/05/2008 | Business
Imagine floods of people visiting your retail store or Web site, and buying $1,000's of dollars of product...and you didn't have to spend a dime! The MOST powerful promotional tool on the planet--a Press Release--is available to just about every business. Yet, over 90% of businesses never submit one. Discover 5 crucial tips you need to know so you can get some PR!
How to Make Your Income Soar Using a Simple 3-step Marketing Tool
By: Bonita L Richter | 21/05/2008 | Business
These days, whether you have predominantly an offline or online business, it makes good sense to use both online and offline promotional strategies. Combining online and offline activities will enable you reach more people; some of them whom you would never have reached online, and vice-versa. Find out about a simple promotional tool you can use to make your income soar!
Marketing Technique - Watch Your Income Soar Using the Simplified "pie in the Sky" Marketing Tool
By: Bonita L Richter | 15/05/2008 | Business
The "Pie in the Sky" Marketing Tool and method consists of using a combination of four active and four passive marketing techniques to create a very powerful, yet easy-to-implement promotional campaign system. Use this marketing panning tool and watch your income soar!
|
|
Business 
