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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

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.

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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.

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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.

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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.

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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

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Last Updated on April 6, 2020

How to Make a Career Change at 50 for Great Opportunities

How to Make a Career Change at 50 for Great Opportunities

Turning 50 is a milestone in anyone’s life, after all you are half way to 100! But seriously, turning 50 is often a time in life when people can sit back and take a look at where they’ve been and contemplate what the future holds.

Can you change careers at 50? It’s not uncommon for people in their 50’s to consider a career change, after all if you’ve spent 20 to 30 years in a career, chances are that some of the bloom is off the rose.

Often, when we are starting out in our 20’s, we choose a career path based on factors that are no longer relevant to us in our 50’s. Things like our parents’ expectations, a fast paced exciting lifestyle or the lure of making a lot of money can all be motivating factors in our 20’s.

But in our 50’s, those have given way to other priorities. Things like the desire to spend more time with family and friends, a slower paced less stressful lifestyle, the need to care for a sick spouse or elderly parents can all contribute to wanting a career change in your 50’s.

Just like any big life changing event, changing careers is scary. The good news is that just like most things we are scared of, the fear is mostly in our own head.

Understanding how to go about a career change at 50 and what you can expect should help reduce the anxiety and fear of the unknown.

What are Your Goals for a Career Change?

As in any endeavor, having properly defined goals will help you to determine the best path to take.

What are you looking for in a new career? Choosing a slower less stressful position that gives you more time with family and friends may sound ideal, but you’ll often find that you’re giving up some income and job satisfaction in the process.

Conversely, if your goal is to quit a job that is sucking the life from your soul to pursue a lifelong passion. You might be trading quality time with family and friends for job satisfaction.

Neither decision is wrong or bad, you just need to be aware of the potential pitfalls of any decision you make.

Types of Career Changes at 50+

There are four main types of career changes that people make in their 50’s. Each type has it’s unique set of challenges and will very in the degree of preparation required to make the change.

Industry Career Change

In this career change, a person remains in the same field but switches industries.

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With an industry change, a person takes their set of skills and applies them to an industry that they have no previous experience in.

An example would be a salesperson in the oil and gas industry becoming a salesperson for a media (advertising) company. They are taking their skill set (selling) and applying it to a different industry (media).

This type of career change is best accomplished by doing a lot of homework on the industry you want to get into as well as networking within the industry.

Functional Career Change

A functional career change would be a change of careers within the same industry.

For example, an accountant at a pharmaceutical company who changes careers to become a human resources manager. It may or may not be with the same company, but they remain within the pharmaceutical industry. In this case, they are leaving one set of skills behind (accounting) to develop a new set (human resource) within the same industry.

In a functional career change, new or additional training as well as certifications may be required in order to make the switch. If you are considering a functional career change, you can start by getting any training or certifications needed either online, through trade associations or at your local community college.

Double Career Change

This is the most challenging career change of all. A person doing a double career change is switching both a career and an industry.

An example of a double change would be an airline pilot quitting to pursue their dream of producing rock music. In that case, they are leaving both the aviation industry and a specific skill set (piloting) for a completely unrelated industry and career.

When considering a double career change, start preparing by getting any needed training or certifications first. Then you can get your foot in the door by taking an apprenticeship or part time job.

With a double change, it’s not uncommon to have to start out at the bottom as you are asking an employer to take a chance on someone without any experience or work history in the industry.

Entrepreneurial Career Change

Probably one of the most common career changes made by people in their 50’s is the entrepreneurial career change.

After 20 to 30 years of working for “Corporate America”, a lot of people become disillusioned with the monotony, politics and inefficiency of the corporate world. Many of us dream of having our own business and being our own boss.

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By this time in our life, we have saved some money and the financial pressures we had with young children have passed; so it’s a perfect time to spread our entrepreneurial wings.

Entrepreneurial career changes can be within the same industry and using your existing knowledge and contacts to start a similar business competing within the same industry. Or it can be completely unrelated to your former industry and based on personal interests, passions or hobbies.

A good example would be someone who played golf as a hobby starting an affiliate marketing website selling golf clubs. If you are considering an entrepreneurial career change, there are a lot of very good free resources available on the internet. Just be sure to do your homework.

Practical Tips on Making a Career Change at 50+

So you’ve decided to take the plunge and make a career switch in your 50’s. No matter what your reasons or what type of a career change you are embarking on, here are some helpful hints to make the transition easier:

1. Deal with the Fear

As stated earlier, any big life change comes with both fear and anxiety. Things never seem to go as smoothly as planned, you will always have bumps and roadblocks along the way. By recognizing this and even planning for it, you are less likely to let these issues derail your progress.

If you find yourself becoming discouraged by all of the stumbling blocks, there are always resources to help. Contacting a career coach is a good place to start, they can help you with an overall strategy for your career change as well as the interview and hiring process, resume writing / updating and more. Just Google “Career Coach” for your options.

I also recommend using the services of a professional counselor or therapist to help deal with the stress and anxiety of this major life event.

It’s always good to have an unbiased third party to help you work through the problems that inevitably arise.

2. Know Your “Why”

It’s important that you have a clear understanding of the “why” you are making this career change. Is it to have more free time, reduce stress, follow a passion or be your own boss?

Having a clear understanding of you personal “why” will influence every decision in this process. Knowing your “why” and keeping it in mind also serves as a motivator to help you reach your goals.

3. Be Realistic

Take an inventory of both your strengths and weaknesses. Are your organizational skills less than stellar? Then, becoming a wedding planner is probably not a good idea.

This is an area where having honest outside input can be really helpful. Most of us are not very good at accurately assessing our abilities. It’s a universal human trait to exaggerate our abilities while diminishing our weaknesses.

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Requesting honest feedback from friends and co-workers is a good place to start, but this is another area where a career coach can come in handy.

4. Consider an Ad-Vocation

Sometimes, making a career change all at once is just too big of a change. Issues like a severely reduced income, geography and lack of benefits can all be impediments to your career change. In those cases, you may want to start your new career as an ad-vocation.

An ad-vocation is a second or ad-on vocation in addition to your primary vocation. Things like a part-time job, consulting or even a side business can all be ad-vocations.

The benefit of having an ad-vocation is being able to build experience a reputation and contacts in the new field while maintaining all the benefits of your current job.

5. Update Your Skills

Whether it means acquiring new certifications or going back to school to get your cosmetology licence, having the right training is the foundation for a successful career change.

The great thing about changing careers now is that almost any training or certifications needed can be free or at very little cost online. Check with trade associations, industry websites and discussion groups for any requirements you may need.

Learn How to Cultivate Continuous Learning to Stay Competitive.

6. Start Re-Branding Yourself Now

Use the internet and social media to change the way you present yourself online.

Changing your LinkedIn profile is a good way to show prospective employers that you are serious about a career change.

Joining Facebook groups, trade associations and discussion boards as well as attending conventions is a great way to start building a network while you learn.

Here’re some Personal Branding Basics You Need to Know for Career Success.

7. Overhaul Your Resume

Most of us have heard the advice to update our resume every six months, and most of us promptly ignore that advice and only update our resume when we need it.

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When making a career change, updating is not enough; this calls for a complete overhaul of your resume. Chances are that your current resume was designed around your old career which may or may not apply to your new goals.

Crafting a new resume emphasizing your strengths for the new position your looking for is key. There are many places that will help you craft a resume online and it is a service included with most career coaching services.

8. Know Your Timeline

There are a lot of factors when it comes to how long it will take to make the career change.

Industry and Functional career changes tend to be the easiest to do and therefore can be accomplished in the shortest period of time. While the Double Career Change and the Entrepreneurial Career Change both require more effort and thus time.

There are also personal factors involved in the time it will take to switch careers.

Generally speaking the more you are willing to be flexible with both compensation and geography, the shorter time it will take to make the switch.

Final Thoughts

Changing careers at anytime can be stressful, but for those of us who are 50 or above, it can seem to be an overwhelming task fraught with pitfalls and self doubt.

Prospective employers know the benefits that come with more mature employees. Things like a wealth of experience, a proven work history and deeper understanding of corporate culture are all things that older workers bring to the table.

And while the younger generation may possess better computer or technical skills than us, if you’re willing to learn, there are a ton of free or nearly free resources available to you.

Deciding on a career change at 50 is a great way to experience life on your own terms.

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Featured photo credit: rawpixel via unsplash.com

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