A lot of businesses struggle for the first 5 years for factors such as:
Cash Flow–There’s a good reason why the phrase ‘cash flow is king’ is so widely used in small businesses. It’s often a neglected area of businesses that can provide the best indication of how well you are doing. Some of the signs that your business has poor cash flow are:
- you’re unaware of your cash flow position or have a cash deficit
- customer payments are late and/or irregular
- your payments to suppliers are irregular or you are struggling to pay debts
- your turnover rate is healthy but your profits are low.
Too busy to handle it now— a lot of business owners think that a task that needs doing can be done later and then keep putting it off. An example of this is putting supplier invoices on the back burner– doing this will result in money issues.
Customer Complacency— you may become buddies with your customers, however, you must remember you have clients and suppliers. To keep your clients, you must work hard to service them, as you might lose them to your competitors.
Competitors Complacency— your competition will constantly be trying to be better than you by plotting innovations. If you are the better business and they’re lagging behind, they might fight hard to become the better business.
Bad Employees— in any business you require fantastic employees who are passionate and well trained. Bad work and attitudes will put off your customers.
Flexibility— is a must within any business; if you run a coffee shop you might not serve cappuccino, but when more customers ask for it, it is time to adjust your menu to prevent them from going somewhere else.
Location, Location, Location— if you have a lovely store in a back street where no clients can discover you, not to mention see you, you are more likely to have business issues and will need to spend more money on marketing.
Bad Planning— Without an excellent business plan and clear goals and objectives for the next 2-5 years, you are more likely to fail, or at least you won’t reach your projected growth.
Over Expansion— you have just recently started your business and it is working out well, so you decide to expand. If you attempt to expand too quickly, you are more likely to sink, not swim.
No Website— Many customers nowadays utilize the Internet to discover new businesses. Without a web presence and the right marketing, you won’t be found and will need to rely more on word of mouth. Make sure you have a website and that you promote it well.
Putting all your eggs in one basket— Do not constantly depend on one client, if that customer pulls out, you will run into money issues. If you understand the risk this could bring, you will have a plan on how to fix it. Thinking your business will have no problems along the way will make it harder for you in the long run.
Insufficient Funds— always make sure you have sufficient funds prior to you starting up your business. Permitting yourself time to set up the financing for your business is an excellent concept, if you do not have sufficient money, wait a couple of months till you have.
Entrepreneurial Stubbornness— Good entrepreneurs are stubborn. Great ones listen…. as an entrepreneur you will have a lot of ideas, however, ignoring people’s thoughtful opinions can prove devastating to a business and its owner. What separates the great entrepreneurs from the merely good ones is the ability to let information in.
Do you feel some of these points apply to you and your business, but you are simply unsure what to do about it?
Bright Business has a 4-step strategy to help you on your way to growth and profitability once again.
Sometimes you truly need a fresh set of eyes and a new perspective to kick your business into the next gear and get going again.