In todays environment, small business owners need to address the pitfalls that could make them fail. Learn about 7 of them and how to succeed.
Target your audience. Look for your best customers. Then, go out and find more customers just like them. Focus on where, when and who you should market to. Reduce marketing costs through accurate targeting. An out-of-control marketing budget can destroy your business.
If you are just starting out, small business success means know your competition. Do a competitive analysis to compare your strengths and weaknesses with your competitors. Do this often and notice changes made to the competitor’s websites and new services or products. If you are an existing small business owner, a competitor analysis should be done monthly to update what they are doing compared to your small business. A good website to pick up a form is www.score.org. If a competitor is the first to advertise a new, innovative approach, then you missed the opportunity.
Poor Inventory Control
Too much inventory can cause excessive cost overruns due to storage, holding inventory too long, and initial buying. Find a vendor that can ship directly to your customer in a short period of time. Manufacture on demand. Track closely what your customers are buying and when. Reduce holding inventory longer than necessary. Reduce cost.
In a bad economy small business cannot do business as usual. As the customers pick other options or reduce spending, the small business owner may lose them. Look at your business in detail. Focus on your best product or services and put effort behind growing these areas. Team with other companies that are a good fit to help reduce overhead. Renegotiate payment terms on your lease, with your vendors, and with your customers. Restructure the small business to reflect the times, lean and mean.
If your small business is experiencing growth then understand why. Forecasting and planning are critical to your success. Stop; take time to evaluate where you are in your company and set goals and actions needed to address the growth. The small business owner may need more employees, new vendors, new space and more money. Maybe you may need a mentor to help through these times. The website, www.sba.gov contains information that may help you.
The phrase, location, location, location, is everything. Before you permanently pick a location, make sure it is the right one. Talk to the people that frequent this location and ask if they would shop at your store or buy your service. Survey the area, stop into connecting stores, visit homes, view traffic and access if this spot is right for your small business. But if the business is already in a bad location, then it may be too late. But there are things the small business owner can do to help. Market to your key customer and offer them incentive to drive the distance to visit your small business. Or carry something that can only be found in your store, or provide a unique service. A bad location can kill a small business so be selective.
Lack of Funds
The number one issue for failure in existing businesses and start up’s are lack of funds. If you have planned an expansion or need startup capital where does the small business go? The www.sba.gov website is a good starting point to test the financial waters. Go to the local office in your area and ask what banks are lending and what are their requirements? Usually a local bank is more willing to invest in its customers, the small business owner.