Advertising

10 Reasons Most Small Businesses Fail and How You Can Buck the Trend

10 Reasons Most Small Businesses Fail and How You Can Buck the Trend
Advertising

It is estimated that as much as 33% of US small businesses will fail in the first two years. While this might seem disheartening at first glance, it’s probably not as bad as it seems considering the number of entrepreneurs who experience runaway success.

In this article, we’ll look at the ten most common reasons for small business failures, as well as how you can position your company to buck the trend.

1. Lack of Capital

Most entrepreneurs start out with a brilliant business idea. However, many companies are not equipped with enough capital to start or take the company to the next level. The sad truth is that without the right capital injection, many great ideas are doomed to wither away after a couple of months.

The key to solving this problem is to invest the time in determining the costs associated with starting and operating your business. Try not to overstate profits but instead, do the necessary research to make sure you have the working capital that is needed to sustain the business.

The next step is to secure your funding. Many entrepreneurs will turn to family and friends to avoid having to dilute their equity by getting a private investor. However, private loans are an excellent way to ensure continued funding for the business, especially in the start-up months.

Advertising

2. Cash Flow Problems

Having just an adequate amount of funds is inadequate. Not having sufficient finances at the right time is a major problem for many small businesses. Handling cash flow is essential to keeping the doors open. However, due to unforeseen events like late payments from clients, unexpected costs, or mistakes in forecasting, a huge chunk of small businesses frequently find themselves running into cash flow issues.

To overcome this common problem, you will need to put in the time to develop an in-depth cash flow forecast; this can be a time-consuming and intricate procedure, so utilizing technology to automate this process can be helpful. Additionally, it’s good to have a ‘cushion’, so if unexpected expenditures turn up, which they inevitably do, you’ll be able to cover them. Planning is the key to overcoming cash flow issues in a small business.

3. Issues with Delegation

Some entrepreneurs are so personally invested in their vision that they feel that they are the only ones who can do it right. Not only is this impossible in many cases, but it is also inefficient and causes burnout. A business owner who fails to train and delegate could face a serious problem if he is out sick or has an emergency.

Entrepreneurs must learn to invest in a team of staff members who can be trusted. The key is to train and then delegate. Effective delegating will leave the business owner to focus more on growing the business and identifying opportunities.

4. Ignoring the Competition

While business competition is healthy for the economy, they can be a threat to the small business owner. An entrepreneur who does not understand his rival may be setting up his business for failure. Often a company is not aware of the competition in their niche until it is too late.

Advertising

To maintain your competitive edge, make certain to do an analysis of the competitive landscape. Additionally, continuously monitoring your competitors will enable you to benchmark yourself versus them, learn from their errors, and most importantly not fall behind.

5. Inadequate Customer Demand

Many small businesses think that the product or service that they provide is the best and never consider whether there will be a market for the business.

It is important to conduct thorough marketing research and make sure that your prospective consumers desire what you’re offering. In a lot of cases, it may simply be a matter of tweaking your product or service, so it aligns with what your target audience wants.

6. Failure to Advertise

It doesn’t matter if you have the very best product on the market if your clients do not know about it. With the increase in internet marketing, small businesses who do not invest in digital means of promoting their products and services may be setting themselves up for failure.

Advertising is not always expensive. There are many low-cost options available to small business owners on a budget. There are also free alternatives available such as social media and email marketing. The key is to research and find out the combination of promotional products and platform that will be best for your business and your target audience.

Advertising

7. Business Idea Isn’t Profitable

Unprofitable ideas are often the result of a good initial business proposition, but soft financials. If the client acquisition costs are higher than the income that they generate, then the business model is either incomplete or just doesn’t make good sense.

The solution to this problem is planning and research. Before starting a business ensure you understand the cost of customer acquisition and how much you are willing to pay to maintain a profit. If your research reveals a high cost to get the product or service into the hands of the customer, consider ways in which you can cut cost or increase your income.

8. Not Going Digital

With a growing number of people spending time online, small companies cannot make the mistake of only focusing on the brick and mortar of the business. Many companies are now finding success in the virtual marketplace.

At the most basic level, if a small business wants to be successful, it must maintain a professional website. In the era of social media and digital marketing, a small business owner may find great opportunities to promote his products and services to clients all over the world.

9. Poor Leadership and Management

Poor leadership and management can be the demise of many small businesses. When individuals at the top who are in charge of coordinating everything, aren’t doing their jobs properly, the rest of the firm falls apart too.

Advertising

A successful business requires leaders and managers that can influence, motivate staff members, and make certain things are working smoothly. It is important to invest in your human resources with training.

10. Changes in the Marketplace

Sometimes small business failure has nothing to do with the day to day operations of the business, but external factors such as the economy or the presence of a brand-new disruptive technology that makes your business outdated.

Not all external factors are out of your control. Preparation, research, and planning can help a small business owner adjust to a changing marketplace.

Small business success is possible despite the daunting statistics. Being armed with information as to the pitfalls many entrepreneurs fall victim to is a good start to making your business successful.

Featured photo credit: rebrn.com via i.imgur.com

Advertising

More by this author

Why should Small Business Owners shift to Cloud-Based Accounting Software? New Girl Has Broken Sitcom Stereotypes How American TV Show New Girl Has Broken Sitcom Stereotypes Startup's first office space 6 critical considerations for your startup’s first office space Are you a Boss or a Leader? Are You A Boss Or A Leader? And One Is Definitely Better Than The Other Five Ways to Sprint to the Top in Business Before 2018

Trending in Entrepreneur

1 7 Effective Ways To Motivate Employees in 2021 2 How To Stay Motivated As You Build Your Business 3 23 Tips for New Entrepreneurs to Get Your Business Underway 4 20 All-Time Best Entrepreneur Books to Make Your Business Successful 5 Why Mentoring Matters: A Guide on a Stellar Example for Employees

Read Next

Advertising
Advertising

Published on July 27, 2021

15 Smart Video Conferencing Etiquette Tips to Follow

15 Smart Video Conferencing Etiquette Tips to Follow
Advertising

During the pandemic, video conferencing replaced in-person meetings and has now become the standard option for business meetings. Over the past 17 months, most workers have gotten past the video conferencing learning curve with Zoom or Microsoft Teams (or their platform of choice).

But just as with in-person meetings, attention can wax and wane. Some say we’re just not used to staring at ourselves so much on the screen. Instead of fixating on that, try employing smart video conferencing etiquette, or you may risk indiscretions that will flag you as a slacker.

Put the Pro in Professional

After more than a year of fine-tuning, here are the new rules of video conferencing etiquette.

1. Mute Your Mobile and Other Devices

The first video conference etiquette you need to know is muting your other devices. Just as in the pre-COVID days, someone’s obnoxious ring tone blaring Taylor Swift’s newest single in the middle of a meeting is also an annoyance if it happens during a Zoom meeting and so is the inevitable fumbling to turn off the sound. Even the apologies to the group get tiresome.

Also, when notifications are activated on the computer that you’re using for the meeting, the incoming message takes over the audio and you’ll miss out on snippets of the conversation. Be sure to eliminate this possible faux pas.

2. Dress the Part

While working from home, you may have fallen into the habit of slipping on your comfiest T-shirt each day. Hey, no judgments! But before you log on to your video conference, try to make an effort with your appearance.

Depending on your company culture and the importance of your meeting, consider dressing the part of the professional whom you wish to project. It will help you feel more self-assured, and others will likely take you more seriously.

For women, wear light make-up, put on earrings, and make sure your blouse is crisply pressed. For men, show up freshly shaved. Wearing a crisp collared shirt in a solid color will usually suffice.

Advertising

Pro Tip: Stay away from wearing white or black, unless those colors look great on you. Consider wearing light blue or brown instead.

3. Stage Your Workspace

Have you noticed the backdrops of experts interviewed on news shows? Bookshelves and photographs are carefully curated, and no busy-patterned furniture or artwork is in sight.

Take note of what appears behind you when you choose the location of your video conferences. Piles of junk mail on the table or stacks of folded laundry on the couch will convey more about your personal life than you care to share. Make sure you remove clutter from the camera’s eye, and present a tidy, orderly workspace to your colleagues, coworkers, and bosses.

4. Put Some Thought Into Lighting and Perspective

Be aware that in a video conference, your computer camera can actually make you look up to ten pounds heavier depending on where you sit. But you can easily drop those added pounds by moving back from the screen to diminish the wide-angle distortion.

Frame your head on the screen by tilting the screen up or down. Also, it’s best to not place yourself in front of a window or bright light, which makes you appear in shadow. Instead, face the light source, moving it (or yourself) until you have a flattering amount of illumination. You can also purchase some small spotlights that allow you to add light as needed.

Pro Tip: If your lights add too much redness to your skin, consider counter-balancing with a green filter.

Remember That Half of Life Is Showing Up

5. Arrive on Time

In the old days of in-person meetings, it was nearly impossible to slip in late into a meeting unnoticed. In today’s video conferences, logging in late still shows poor form. Instead, strive to arrive five minutes early and get yourself settled.

Once the meeting is underway, the host may be less attentive about late arrivals waiting to be let in. Diverting the host’s attention away from the meeting with a tardy entry request is the ultimate giveaway that you didn’t honor the schedule. If you don’t want a black mark against you, log in on time.

Advertising

6. Turn on Your Video

Few people like to see their face on the screen, but buck up and turn on your camera in video conferences. In most cases, it’s better to be a face on a screen than a name in a blank square. Your statements will be more memorable when other meeting attendees can see you.

If you need to turn off the video, either because of a poor connection, some commotion in the room, or a need for a quick break, give a short explanation via the chat feature. Then, go back on video as soon as you’re able.

Pro Tip: Keep your explanation for your departure pithy. “Sorry! Doorbell rang. Back in five” says it all. Be sure to honor what you say in chat and really do return in five minutes.

7. Plan Ahead Before Sharing Your Screen

Don’t be one of those people who makes everyone else wait as you click through folders in search of a document. That’s just poor video conferencing etiquette. If you know you’ll need to share a document or video on your screen, prepare by pulling it out of its folder and onto your desktop. Also, clean up the files and folders on your desktop to reduce clutter and facilitate easy access. Close other programs like chat, calendar notifications, and email. Disable pop-up notifications to ensure there’ll be no unforeseen distractions.

Be sure to remind the host before the meeting that you’ll need them to activate the screen-sharing function. Show courtesy once you’re finished by hitting “stop share” to return to the screen with participants.

Attend to the Pesky Details

8. Make Sure That Meetings Remain Right-Sized

With the easy accessibility of video conferencing, it can be tempting to extend the meeting invitation beyond the core group and include everyone peripherally involved in a project. But just as with in-person meetings, the more people involved, the more unwieldy the meeting becomes.

Use good judgment when asking others to sit through a video conference so that you don’t needlessly take up others’ time and so that participants can be fully engaged.

9. Remember to “Unmute” Before You Speak

Most of us are likely able to count on one hand the number of video conferences when someone didn’t have to be reminded, “You’re on mute!” Forgetting to unmute before speaking has become one of the most common missteps in video conferencing.[1]

Advertising

Show everyone your impeccable video-conferencing poise by managing your mute feature with flawless control.

10. Stay on Point to Keep the Meeting Length in Check

As with in-person meetings, an agenda with assigned time limits for discussions remains necessary to keep a meeting focused. Data shows, however, that video conferencing can actually reduce meeting time.[2] Reasons include the elimination of commuting time and the ability to screen share and annotate to keep everyone on task.

Additionally, side conversations are virtually impossible with video conferencing now that you can no longer have back-and-forth exchanges with the person beside you.

Pro Tip: If you’re running the meeting, let attendees know in advance the protocol for the chat feature. Is it okay for them to “chat among themselves” or not? (See point 11, as well.)

Talking Has a Time and a Place

11. Chat Appropriately

Just like side conversations or texting in an in-person meeting, the use of the chat feature during a video conference can be disrespectful unless it’s directed to all participants. Hence, it’s good video conferencing etiquette to mind your use of the chat.

At the start of the meeting, you may want to ask the host if it’s alright for participants to use the chat feature. This allows them to disable it if they choose. Used appropriately, it can be a helpful tool to clarify or amplify an earlier point once the conversation has moved on or to let the group know that you need to sign off early (and why).

12. Use the “Raise Hand” Feature to Avoid Interruptions

The slight lag in many video conferences can result in speaking over another person if you attempt to jump into a conversation. To avoid this awkward interruption, indicate when you have something to add to the discussion with the raise-your-hand feature that signals the host you would like to speak. This effective meeting management device makes video conferencing run more smoothly, especially with a large group, but it must be activated and monitored by the host.

Pro Tip: For meetings of six to ten people, sometimes the old-fashioned raising of your physical hand may be the best option. But it’s up to the meeting host. Ask them what they would prefer, and follow that.

Advertising

13. Don’t Record the Session or Take Photos Without Prior Permission

In this case, not sharing is caring. The “sharing culture” made popular through social media has little place in video conferencing. Before recording a meeting or capturing a screenshot of the participants, always ask for consent in advance from the full roster of attendees. Knowing that a video conference will be photographed or recorded could have a bearing on what others are willing to discuss.

Manage Yourself

14. Minimize Distractions

While de-activating audio and video features can keep distractions from affecting the other participants, you will need to manage noise and disruptions on your end to give your full attention to the meeting.

Move out of high-traffic zones in your home, keep your door closed, and ask family members to be considerate.

15. Save Snacking for Later

Save snacking for later—or earlier. Eating while on video conference is a no-no. Munching in front of the group while close to the camera—as you are when video conferencing—subjects the participants to an up-close and (too) personal view of your food consumption process.

However, it’s perfectly fine to sip quietly from a glass of water or cup of coffee or tea. If the meeting threatens to last for more than two hours, you may want to ask the host in advance to schedule a five-minute break at the halfway point.

Final Thoughts

Even though bosses are now beginning to ask workers to spend some of their workdays on-site, up to 80 percent will permit employees to work remotely at least part of the time, which means more video conferencing in your future.[3] Mastering these video conferencing etiquette tips will help you dial in—as well as dial back—your participation and demonstrate your unwavering level of engagement to the team.

Featured photo credit: Chris Montgomery via unsplash.com

Reference

Read Next