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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

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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.

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    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.

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    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.

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      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.

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      Ivan Dimitrijevic

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

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      Last Updated on May 28, 2020

      How to Succeed in Business: 10 Skills Every Entrepreneur Needs

      How to Succeed in Business: 10 Skills Every Entrepreneur Needs

      Learning how to succeed in business used to be a case of being really good at one skill or area and milking it for all its value. Today, we are fast becoming a “skills economy”[1], driving trends in employment and even the way we approach entrepreneurship.

      To succeed in today’s business landscape, business owners and executives need to possess a mix of skills that enable them to stay ahead and adapt to change.

      1. Digital Savviness

      As the adage goes: “If you’re not online, you don’t exist.” Today’s entrepreneurs need to take to the internet to increase their presence and to remain relevant in an evolving business landscape.

      Companies like Amazon, Netflix, Airbnb and more are a testament to the disruptive impact of technology and the new image of what it means to be a skilled, successful professional. Think about today’s Mark Zuckerberg versus a banker from the 90s.

      Being able to quickly adapt to new technology, like cloud applications and collaborating remotely across the internet, is fast becoming the expected norm for executives.

      For businesses, discoverability on the web is becoming a quick litmus test for credibility. Potential customers and investors bank on the first page of Google to make up half their minds about making further transactions with a business. GE Capital Retail Bank found that 81% of retail shoppers conduct online research before buying[2].

      How to Develop This Skill

      For a start, begin by hosting your website and reserving all of your brand’s handles across social media platforms. While hiring a web developer might sound like the next step, consider first hosting your company’s site on more user and budget-friendly options like Squarespace, Wix, or WordPress.

      From here, you can start on some simple search engine optimization techniques that will increase your discoverability over time. Through keyword research, organic content creation, and external back-links, your site will, eventually, slowly but surely garner more traffic.

      Note, however, that an increase in search traffic does not immediately imply an increase in revenue. But it’s a start for delving into customer conversion rates in the future.

      2. Financial Forecasting

      Let’s face it, many business owners feel that time could be better spent on developing and running the business instead of planning for it financially. However, a financial forecast serves as a roadmap for shaping any kind of business and is not just reserved for the likes of listed companies providing financial guidance to shareholders.

      Largely, forecasting and planning your financial goals will give you a clearer idea of resources required and ways to measure success. It can also provide assurance to investors as a testament to the thorough research and planning you have done when included in business plans.

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      However, inaccurate forecasts can lead to livid investors and mismanagement of expenses, which could potentially result in financial teething problems. When creating a detailed financial forecast, a rule of thumb is to always start with your expenses.

      How to Develop This Skill

      Generally, it is easier to calculate and predict your expenses compared to your revenue, so noting down your expenses is a starting point to benchmark how much you might need to generate in sales to turn a profit. It is a good habit to regularly update and evaluate how adjacent your operations are to what you have forecasted.

      Building a precise set of growth forecasting will take time, but, remember, you are an investor in your own business. You must have confidence in the validity of your business concept.

      3. Video Production Skills

      The rise of visual mediums and the dopamine boosts it gives to users has long been researched and proven as providing an unfair advantage to businesses that leverage it[3].

      If you’re a heavy user of social platforms like Facebook, LinkedIn, and even YouTube, you’ll know that it’s pretty hard to stop once you get started on a binge-watching session.

      In fact, video marketing is seeing a non-stop rise in popularity and effectiveness when used in conjunction with social media to drive traffic and boost conversions[4]. According to research, by 2019, 80% of global Internet consumption will be video content[5]. With video marketing becoming more ubiquitous, businesses that fail to leverage the power of video are almost certain to lose out.

      How to Develop This Skill

      Some ways to get started with using videos for your business would be:

      • Creating a series of educational videos that cover useful information for your audiences
      • Live videos interacting with your community at large (these can be shot on your smart phone)
      • Using videos on landing pages to boost your customer conversions

      4. Benchmarking Personal Goals to Business Performance

      As far as you get into achieving endeavours on your business bucket list, it’s important to remember that being an entrepreneur is just one facet of your identity. Don’t forget why you started in the first place.

      Ambition usually stems from some lifestyle goals you’ve always wanted for yourself and the people you might be providing for today or in the future. Working 24/7 is a surefire route to burnout and may manifest in an unhealthy interaction between partners and employees as well.

      How to Develop This Skill

      Money can’t be your only motivation, but look into the positives of how having more financial freedom and time can impact your life. In the short term, involving your interests in your businesses can make everyday tasks feel less like mundane errands. In the long run, your business may also bring you fruitful rewards, including personal fulfilment.

      Set realistic income goals to manage expectations for your performance and your company’s revenue, especially during its earlier stages. See how projected growth can align with your personal goals and make adjustments accordingly to maintain a balance between growth and your personal values.

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      5. Leveraging Healthy Competition

      Some of the best athletes who have spent their careers neck-and-neck with each other have changed the standards in their respective sports. The notion of healthy competition applies to the business world more than it may seem on the surface.

      Innovation has always been a key driver in free markets, which were intended to boost economies and provide customers with more choices. Just like the biggest sporting rivals that build on each others’ game, you can use your biggest competitors to hone your strategies.

      How to Develop This Skill

      Turn a competitive market landscape into an advantageous one by leveraging on long-established systems your business proposes an alternative to. Learn from the mistakes of predecessors once you discover their product or service loopholes.

      For example, the Dollar Shave Club’s viral video[6] became a big hit because it hit the right buttons of consumers being tired of purchasing expensive but low quality shavers from incumbent retail giants. Going in second meant they could fill a gap competitors might not even have been aware of.

      Apart from lifting off from what could have been your second-mover advantage, solidify your place with your business’ own first-mover advantage — whether you’re tapping into a new geographical region, unexplored market sector, or introducing a business model that proves more viable than others. There’s always room for improvement in business from mature markets to newly emerging ones.

      6. Honing Pitches to Investors

      Stand out in a broad mix of budding entrepreneurs by mastering the art and science behind a solid investor pitch that can determine the acceleration of growth for your business. Get comfortable talking about your ideas and receiving feedback or questions from peers, partners, and advisors before setting out to make a good impression on potential customers and eventually investors.

      The phrase “If you can’t convince them, confuse them,” will certainly never get your business funded, especially in front of seasoned venture capitalists who have seen thousands of startup pitches. You should be able to deliver a quick elevator pitch that summarizes your unique proposition and its market viability for casual meet-ups[7] because you sometimes only have a few minutes to make a good impression and move on to another meeting.

      How to Develop This Skill

      Develop your investor pitch deck by highlighting your business’ strongest points, which will vary for every funding round. Create your deck with the investors’ interests in mind, balancing technical jargon and buzzwords.

      You can also introduce your diverse team of experts, some proven traction, or the current state of the market to demonstrate profitability and the attractiveness of the opportunity to investors.

      Ensure each slide flows into the other to develop a persuasive narrative, utilizing consistent and intelligent design principles to support your content.

      7. Developing a Strong Brand Identity

      In a world of saturated content and numerous emerging businesses that offer similar service lines, developing a unique brand identity will help you cut through the noise and stand out from your competition. From aesthetics to the body of clients you’re associated with, these contribute to how you’re perceived by prospects looking to buy.

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      Evaluating your brand identity is linked to identifying your target customers, your business goals, a proposed promised land your solution achieves, and identifying values that are aligned to these components. Brand identity serves as a guide to maintaining consistency and creating an image you want your business to be associated with.

      How to Develop This Skill

      Efforts to strengthen your brand identity are closely tied to giving marketing strategies a direction. By knowing what makes your target customers tick, their values, ideals, and behavior, you will be able to elevate your business from simply being a service or product to be utilized into a projected brand customers and partners would be happy to identify with.

      8. Automating to Your Advantage

      The need for efficiency is often the general problem new businesses aim to resolve across all markets and industries. Assure that your proposed solution is more efficient than what’s readily available in the market to instill the need for it.

      Efficiency is often achieved nowadays through digitalization and new technologies. While your product or service may not necessarily be the most innovative out there, you can apply the same automation concept across your business’ daily operations.

      How to Develop This Skill

      Shorten turnaround times and conversion rates by investing in small tools for automation where you deem fit. While it may come out of your pocket in the early stages, evaluate the holistic advantages and benefits of automating certain processes. At our office, we’ve tried using collaborative apps like Workplace by Facebook, Slack, Asana and a few other popular apps to reduce human error and friction.

      9. Managing Millennials

      Your team plays an integral part in whether your business will accelerate at breakneck speeds or be dragged down by dead weight. Hence, it is imperative to be selective and strategic when choosing your team.

      In leaner small business teams, the addition of every new teammate can impact how your organization culture evolves.

      Today, learning to manage millennials has become an increasingly sought after skill as well due to the increasing proportion of them in the workforce[8]. Some brand them as strawberries that are easily bruised and others loath their need for “meaning” and wearing t-shirts to work.

      How to Develop This Skill

      Naturally, there are many misconceptions surrounding millennials, and various businesses would do well to leverage their unique skills.

      A couple of ways to manage a millennial team include:

      Encourage a Flat Team Structure With Open Communication

      Maintain clear professional lines between supervisors and subordinates but keep communication channels open to ensure no negativity festers.

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      Offer Constructive Feedback

      Baby boomers are well known for their straightforward approach to delivering feedback. Millennials, on the other hand, don’t always take feedback in a form that could be construed as deep criticism.

      Being constructive with feedback ensures that we don’t coddle millennial workers but also tell them the things they need to hear.

      10. Maintaining a Network of Connectivity

      Instead of proposing a business that’s ambitiously and entirely disruptive to the supply or process chain in a respective industry, foster connections with other companies that cater to the same target customers as long as they provide a different service.

      By creating partnerships, both you and other businesses thrive simultaneously through creative avenues for customers to utilize your products and services for a holistically improved user experience.

      Sole market disruption isn’t always the best strategy to take. Not everybody has the opportunity, bandwidth, or financial capacity to dominate and monopolize a marketplace. See your potential for integration into other businesses and services as a good opportunity for co-collaborative marketing efforts with shared campaigns, split costs, and a strengthened customer database for everyone to tap into.

      How to Develop This Skill

      Regardless of the stage your business is in, never stop looking for ways to expand your network. Keep in contact with mentors you can look to for valuable industry advice that can help you avoid pitfalls and costly mistakes. Strengthen brand awareness by attending cross-industry events and casual meet-ups to open your business to reinvention and innovation.

      As the African proverb goes:

      “If you want to go fast, go alone. If you want to go far, go together.”

      Collaborating will get you where you want to go quicker and gear you up for further growth.

      More Tips on How to Succeed in Business

      Featured photo credit: Tyler Franta via unsplash.com

      Reference

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