By Charissa Struble
According to the Small Business Administration, “About half of all new establishments survive five years or more and about one-third survive 10 years or more.” It’s rather naive to believe that your business is immune to this phenomena. If you don’t stay on top of things the way that you should, you could very well be faced with the difficult decision to close up shop and pursue other avenues professionally.
With so much competition to deal with, it pays to be attentive. Let things slide for too long and you’ll have a disastrous situation confronting you. No one wants to put the time and financial investment into a business only to have it fail prematurely. Complacency is the killer of professional dreams.
An infographic created by Top Business Degrees aims to explain why some businesses fail and others flourish. It states that there are a number of things that entrepreneurs can do to increase longevity of their small business. Starting small is the first step. Knowing the market, maintaining quality products, and listening to customers are also important business practices. So are coming up with company goals, planning and controlling inventory, marketing, and keeping things simple.
Here are five things that could cause you to close your doors for good.
1. Not a big enough demand for the products or services that you’re selling.
If the big -ox retailers offer the same or similar merchandise and services, you’re going to have a really tough time appealing to customers. The mentality of convenience runs strong. That’s why companies like Walmart and Target do as well as they do. Their wide range of products and services make it easy to do all the shopping a person needs to do in one place.
2. Poor accounting.
If you don’t keep good track of the books, your business will suffer. You’ll miss out on opportunities to cut costs, pay vendors on time, and order new products. Worst of all, you could make a very expensive mistake that the IRS takes note of and end up paying all sorts of fees and penalties because of your error.
3. Out-of-control costs.
Paying too much for rent, labor, and materials can be the kiss of death for small businesses. Bartering with other entrepreneurs can help you defray costs and keep more of the profit that you make in your bank account.
4. Dysfunctional managers.
The leaders that you choose for your business will play a large role in its success or failure. If your managers exhibit erratic or even passive behavior, chances are the outlook will be grim. If you’re doubting whether a family member or friend would make a good leader for your small business, do yourself a favor and hire someone else. Although you may end up paying more for outside help, you’re preventing drama from occurring and potentially ruining your chances of having a longstanding business in the future.
5. No plan for the future and emerging technologies.
The world is changing. As systems get updated and new products are invented, you have one of two choices. You either embrace what the future holds or fail miserably when your competition outperforms you because of the changing times.
The goal of every small business owner is to succeed in his or her pursuits. By paying special attention to the things that could possibly ruin your reputation and cause you to call it quits professionally, you’re exercising the type of awareness that it takes to secure a place in your community. You’re essentially earning the right to be there by giving your customers or clients a sense of security.