There are countless ways to sink a business. Some of them are quite creative. But most are of the mundane variety. There are more ways to weaken and destroy a small business than there are ways to keep one going strong.
Sometimes the key to keeping a business strong is to be familiar enough with what would weaken the business. Some of those common pitfalls include:
- Undercapitalization
- Taking employees for granted
- Attempting to grow before the timing is right
- Giving up too soon
Recognizing ahead of time that these are among the most common problems failed businesses face, you have a chance to succeed by taking them seriously ahead of time. You will also want to be proactive in the following ways:
Secure Capital Ahead of Time
The surest way to fail is to run out of money. If you don’t qualify for traditional loans, you are going to have a hard time raising enough capital to get your business off the ground. If you do manage to get your business moving, you will find that keeping it moving is all but impossible without more money.
Starting without enough capital, and relying on faith and hard work to get you the rest of the way is not good business sense. Hope is not a strategy. Acquiring adequate amounts of operating capital is.
Fortunately, there are a few non-traditional lenders making easy business loans available to small business owners who might be otherwise locked out of their dream. You can get as much as $350,000 in the form of a loan, or as much as a $500,000 credit line. These are not insignificant sums. Knowing you have sufficient runway goes a long way toward getting your business off the ground, and keeping it flying high.
Value Your Employees
There are many creative ways to show how much you value your employees. The important thing is understanding why it is so important for you to do so.
There is a reason why sports teams pay so much money for a good coach, a left tackle, a center-fielder, or a goalie. The right member of a team can be the difference between success or failure. If you have a team that is successful, it is sometimes hard to know which team member is making the difference. It is not always the one scoring the points. It might be the one making the assists.
You have to demonstrate your appreciation for everyone on the team. Singling one member out may be doing more harm than good. It can result in important members of that team feeling undervalued. Lose the wrong person, and your team falls apart. If an employee is worth keeping, she is worth being shown appreciation.
Know When to Grow
Beware of the mantra, “grow or die”. There are plenty of businesses that don’t grow, but are quite successful. A restaurant with only ten tables and 2 servings a day can do quite well without expanding. A church of 70 members can thrive for generations.
Your business might be just fine at its current size and complexity. Trying to force growth onto a business that is already right-sized is more often the kiss of death. Concentrate less on growing and more on finding the right size for your business.
Hang in There
Failure most certainly is an option. For truly great endeavors, it’s a requirement. Samuel Beckett would advise you to try again. Fail again. And fail better. Failure can be a far better teacher than success. The key is not to avoid failure. Rather, avoid giving up.
There is a difference between failing and quitting. It is important to be able to recognize a lost cause and know when to retire the field. But that is only a single battle and not the entire war. Achieving success in business is hard. The most successful business owners failed many times, and have more failures in their future. What they did not do is throw in the towel. They learned their lessons, and retooled. You can too.
When it comes to small business success, there are no guarantees. But you stand a pretty good chance if you obtain necessary capital in advance, appreciate your employees, know when to grow, and hang in there.
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