Advertising
Advertising

6 Biggest Reasons Why Your Small Business is Stagnating

6 Biggest Reasons Why Your Small Business is Stagnating

These days everyone wants to be an entrepreneur, so way too many people rush into the world of small business headfirst, without taking into consideration the many variables that can make you or break you. Some even luck out and are able to quickly learn from their mistakes on the fly, but most fail within the first year. This is why you see a few people at the other end of the spectrum – fairly ambitious, yet careful and calculated.

The careful approach can be a good one, but it is easy to get bogged down in various technicalities and have your business stagnate. If you are interested in promoting growth and expanding your business, then you should try to address the common issues small business face, which are discussed in more detail bellow.

1. You don’t engage your customers

Advertising

Reaching out to customers

    “Engaging the customers” is kind of a broad term, so let’s look at some of the different aspects it covers:

    • Good customer service
    • Rewarding loyalty
    • Inspiring trust
    • Social media interaction
    • Asking for feedback

    If you want to learn more about what the customers want, then go and ask them. Granted it takes a bit of work, but developing a great relationship with the customers and building a loyal following has many benefits. This extends to online shopping as well. Whether you are opening online shop or want to start selling your goods on Amazon, there is a right way to do things. It involves creating a great shopping experience for the customers. This means that they can find what they are looking for effectively, have access to interesting offers if they buy multiple products, can get in contact with you and sort out any problems, and they need to be able to finish the whole process quickly.

    2. You try to do to everything yourself

    It’s one thing to be very hands on and not want to delegate simple tasks, but once you start doing 4-6 different things it keeps you away from the really important stuff. Let’s say you are a great cook and have opened your own restaurant. You need to be focused on keeping the quality of the food and the service up to standard, and on making the right adjustments.

    Advertising

    If you suddenly start mopping the floors, acting as head chef, doing your own accounting, promoting the restaurant on social media and posting two articles a day on your website’s blog, chances are you are going to burn out, and the restaurant will be in a poor state. You don’t have to hire an army of people, but be sure to delegate the heavy grunt work and focus on making business decisions and managing your employees.

    3. You don’t utilize modern technology to its full potential

    We’ve already touched on the importance of social media interactions, but small business can be greatly improved through the liberal use of online technologies. With fast and adaptable approaches to software development, i.e. focusing on agile methodology, it is possible get exactly what you need in a relatively short time, through effective communication with the developers and on-the-fly tweaks.

    A good website allows companies to reach out and market themselves to an international audience, while the right custom software helps them significantly improve their efficiency, cut down on costs, and. For retailers and restaurants, switching to a more modern POS system can make a huge difference, while many different small business can save time and money in the long run using applications specifically tailored to their needs.

    Advertising

    4. You don’t set yourself apart from everyone else

    Standing out

      A business can do quite well, and stay afloat for years making a modest profit even if it doesn’t have any special features that make them particularly unique or appealing. However, you never want to get into the “let’s just get by” mindset, as it will all but ensure that your business never grows past those initial stages. Unless you are dealing with a very limited niche market, you will have to deal with a relatively saturated market, so any defining feature that helps you stand out and makes people remember you is going to be a key component in sparking growth.

      5. You focus on growth at the expense of everything else

      There will come a time where you have enough of a demand for your products and to warrant expansion, and an efficiency that allows for this expansion to happen. However, it needs to be done strategically. A lot of entrepreneurs make the mistake of jumping at the opportunity to expand their business at the first chance they get, and focusing all their energy on that goal. This can lead to a drop in quality of service as you start spreading your resources thin. It is important to scale your growth based on what you can realistically handle without sacrificing productivity or quality.

      Advertising

      6. You can’t handle the extra workload effectively

      This is a direct extension of the last point. A lot of people believe that once their business starts growing things will magically fall into place and that they will be able to sit back and let this well-oiled money-making machine of theirs keep growing exponentially. Unfortunately, this is not the case. As your business grows so do your obligations and complications. It’s easy to underestimate the level of work that goes into it, and face the sobering truth – you are not prepared to take on the extra workload. This is where things can really fall apart, forcing businesses to work hard just to stay afloat, let alone turn a profit.

      Even if you make the first big steps and start growing your business, you can still hit a wall if you haven’t planed things out right. It’s similar to how Hollywood movies often go well over the initial budget as the production drags on, and many of them end up as scrapped projects as a result. Be realistic about how much a project will cost and how much time and effort it will take to see it through. If you are overconfident and don’t anticipate little setbacks and hidden costs, you may very well cut yourself short and keep stagnating.

      More by this author

      Ivan Dimitrijevic

      Ivan is the CEO and founder of a digital marketing company. He has years of experiences in team management, entrepreneurship and productivity.

      50 New Year’s Resolution Ideas And How To Achieve Each Of Them 8 Fun and Unique Birthday Party Ideas for People in Their 20s 50 Cleaning Hacks for Your Home That Will Make Your Life Easier 40 Amazing Date Ideas for Valentine’s Day 9 Unexpected Benefits Of Foot Massage That Make You Want To Have One Now

      Trending in Work

      1 How to Write a Powerful Mission Statement for Your Business 2 20 Inspiring Vision Statement Examples (2019 Updated) 3 How to Quit Your Unfulfilling Job and Lead Your Dream Career 4 8 Critical Skills for Workplace Success and Career Advancement 5 How to Find Work Motivation When You’re Unfulfilled at Work

      Read Next

      Advertising
      Advertising
      Advertising

      Published on March 20, 2019

      How to Write a Powerful Mission Statement for Your Business

      How to Write a Powerful Mission Statement for Your Business

      Have you ever felt lost in the minutia of your job?

      As a business owner, I can relate to getting bogged down in the day to day operations of my business. Things like inventory, payroll, scheduling, purchasing and employee management take up the bulk of my day.

      While these things are important and need to get done, focusing too much on the details can make you lose sight of the big picture. This is why having a good mission statement comes in handy.

      What is a Mission Statement?

      Put simply, a mission statement is an internal document that provides a clear purpose for the organization. It provides a common reference point for everyone in the organization to start from.

      In other words, after reading your company’s mission statement, managers and employees should be able to answer the question “What are company’s main objectives?” For example, Southwest Airlines mission statement reads:[1]

      “Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth.”

      In this single statement, Southwest conveys the company’s goals of providing the highest level of customer service as well as providing a good working environment for their employees.

      Mission Statement VS. Vision Statement

      While the mission and vision statements are related, there are subtle but distinct differences the you should be aware of.

      First of all, a mission statement is designed primarily as an internal company document. It provides clarity and direction for managers and employees.

      While there’s nothing wrong with sharing your company’s mission statement with the outside world, its intended audience is within the company.

      While a mission statement provides a general framework for the organization, the vision statement is usually a more inspirational statement designed to motivate employees and inspire customers. Going back to Southwest Airlines, their vision statement reads:[2]

      “To become the world’s most loved, most flown, and most profitable airline.”

      This statement inspires good feeling from the customer while motivating the employees to achieve that vision.

      What Does a Good Mission Statement Look Like?

      When coming up with a mission statement, it’s important to take your time and do it right. Too often, people (especially entrepreneurs) just write down the first thing that comes to mind and they end up with worthless or (worse yet) a generic mission statement that is utterly useless.

      Advertising

      Remember, a mission statement should provide a common framework for everyone in your organization.

      When writing a mission statement, you should always try to incorporate the following;

      • What we do?
      • How we do it?
      • Whom do we do it for?
      • What value are we bringing?

      Now, you can see how tempting it is to just come up with something generic that ticks off those four boxes. Something like “We provide the best widgets available online for the consumer.”

      After all, that did check off all the boxes:

      What we do? Provide widgets.

      How we do it? Online.

      Who do we do it for? The consumer.

      What value we bring? The best widgets.

      The problem with this mission statement is that it could apply to any number of companies producing the same widget. There is nothing to distinguish your company or its widgets from any of your competitors widgets.

      Compare that mission statement to this one:

      “We provide the highest quality widgets directly to the consumer at an affordable price backed up with a 100% satisfaction guarantee. If our clients aren’t 100% satisfied, we’ll make it right.”

      What’s the difference?

      Both mission statements answer all the same questions of what, how, whom and value. But in the second statement, they are differentiating their company from all other competitors by answering the question “what makes us unique”.

      Another way to read that is, “Why you should buy from us.” In this example, it’s because our widgets are of the highest quality and we stand behind them 100%.

      Advertising

      You might have noticed the statement didn’t say that we sell widgets at the lowest possible price. That’s because we are emphasizing quality and satisfaction over price.

      A different company’s mission statement may emphasize selling widgets at the lowest possible price with little to no mention of a guarantee.

      Hallmarks of a Good Mission Statement

      1. Keep It Brief

      Your mission statement should be no longer than three sentences. This is not your company’s magnum opus.

      You should be able to distill the what, how, who and why questions into a succinct message.

      2. Have a Purpose

      A company’s missions statement should include the reason it even exists.

      Make clear exactly what the company does with statements like “We strive to provide our customers with …….”

      3. Include a “How”

      Take this as an opportunity to differentiate your company from its competitors.

      How do you provide a product or service that’s different or better than how your competitor provides it?

      4. Talk About the Value You Bring to the Table

      This is where you can really set yourself apart from the competition. This is the “why” customers should buy from you.

      Do you offer the lowest prices? Fastest delivery? Exceptional customer service? Whatever it is that sets you apart and gives your particular products, services or company an advantage talk about it in the mission statement.

      5. Make Sure It’s Plausible

      It’s okay to shoot for the stars just to settle for the moon, but not in a mission statement.

      Being overly ambitious will only set you and your employees up for failure, hurt morale and make you lose credibility. You will also scare away potential investors if they think that you are not being realistic in your mission statement.

      6. Make It Unique and Distinctive

      Imagine if someone who knew nothing about your business walked in and saw how it was operating, then they read your mission statement. Would they be able to recognize that mission statement was attached to that business? If not re-work it.

      7. Think Long Term

      A mission statement should be narrow enough so that it provides a common framework for the existing business, but open enough to allow for longer term goals. It should be able to grow as the business grows.

      Advertising

      8. Get Feedback

      This is very important, especially from managers and employees.

      Getting their input can clarify how they currently see the company and their role within the organization. It’s also a good way to get people “on-board,” as studies show that people are more likely to go along with an idea if they feel included in the decision making process beforehand.

      9. Review Often and Revise as Necessary

      You should review the missions statement often for two reasons.

      First, as a reminder of what the essence of the company is. It’s easy to forget when you are in the day to day grind of the business.

      And two, to make sure that the mission statement is still relevant. Things change, and not everything can be anticipated at the time a mission statement was written.

      For example, if a mission statement was written before the advent of the internet, a company that use to sell things door to door now probably has a website that people order from. You should always update the mission statement to reflect these changes.

      The Value of Mission Statements: Why Go Through All of These in the First Place?

      It may seem like a lot of work just for a few sentences that describe a company, but the value of a well written mission statement should not be discounted.

      First of all, if you are an entrepreneur, crystallizing the what, how, whom and value questions will keep you focused on the core business and its values.

      If you are a manager or other employee, knowing the company’s basic tenants will help inform your interactions with both customers and colleagues alike.

      Strategic Planning

      A relevant mission statement acts as a framework for strategic planning. It provides guidance and parameters for making strategic decisions for the future of the company.

      Measuring Performance

      By having the company’s mission in a concrete form, it also allows for an objective measurement of how well the organization is meeting its stated goals at any one time.

      Management can identify strengths and weaknesses in the organization based on the criteria set forth in the mission statement and make decisions accordingly.

      Solidifying the Company’s Goals and Values for Employees

      Part of a well run organization is nurturing happy and productive employees.

      As humans, we all have an innate need for both purpose and to be part of something larger than ourselves. Providing employees with a clearly defined mission statement helps to define their role in the larger organization. Thus, fulfilling both of these needs.

      Advertising

      Now I’m not saying that a mission statement can overcome low pay and poor working conditions, but with everything else being equal, it can contribute to a happier and more productive workforce.

      To Hold Management Accountable

      By creating a mission statement, a company is publicly stating its highest values and goals for the world to see. By doing so, you are inviting both the public and your employees to to scrutinize how well the company lives up to its ideals.

      So if you state that you only provide the highest quality products, and then offer something less, it’s fair for both the public and the employees to question, and even call for a change in management.

      If management doesn’t take the mission statement seriously, no one else will either; and the legitimate authority that management rely’s on will be diminished.

      To Serve as an Example

      This is the opposite side of the coin from the previous statement. If the highest levels of management are seen taking the mission statement seriously and actively managing within the framework of the statement, that attitude filters down throughout the organization.

      After all, a good employee knows what’s important to their boss and will take the steps necessary to curry favor with them.

      Finally, use the company’s mission statement as a way to define roles within the company. You can do this by giving each division in the company a copy of the mission statement and challenge the head of each division to create a mission statement for their respective departments.

      Their individual mission statements should focus on how each department fits in and ultimately contributes to the success of the company’s overall mission statement. This serves as both a clarifying and a team building exercise for all parts of the organization.

      Final Thoughts

      Developing a mission statement is too often just an after-thought, especially for entrepreneurs. We tend to prioritize things that we perceive will give us the biggest “bang for our buck.”

      Somehow, taking the time and effort to sit down and think seriously about the what, whom, how and value of our business seems like a waste of time. After all, we got in the business to make money and become successful, isn’t that all we need to know?

      That mindset will probably get you started okay, but if you find yourself having any success at all, you’ll find that there really is such a thing as growing pains.

      By putting in the time and effort to create a mission statement, you are laying the groundwork that will give you a path to follow in your growth. And isn’t building long term success what we are really after?

      More Resources About Achieving Business Success

      Featured photo credit: Fab Lentz via unsplash.com

      Reference

      [1] Southwest Airlines: About Page
      [2] Fit Small Business: 10 Vision Statement Examples To Spark Your Imagination

      Read Next