This article from the New York Times discusses why it’s important to be innovative and aggressive in a tough economy and features three small business owners who had to think outside the box in order to make a profit during the economic downturn. And that made us wonder: Why did these guys thrive while other businesses either stopped growing or failed altogether? And why do businesses stop growing? Here are the top 5 reasons your business has stalled and what you can do to jumpstart it.
#1 The Problem: Poor Planning
While writing a business plan is about as exciting as watching paint dry, it’s an important part of starting a business. Your business plan helps you stay focused on your vision and goals, and helps you plan how you’re going to achieve them
The Jumpstart: Write! Revisit! Revise!
It doesn’t matter how long the business plan is; it can be 4-plan or a 50-page plan as long as it contains the type of product or service you wish to provide, the problem that the product is going to solve, and how you’re going to go about getting that product or service out into the world.
Once you’ve written your business plan, review it monthly to make sure your vision and goals are still the same. Every six months to a year, revisit your plan and make revisions as necessary. Remember, if your business is growing, changes and amendments will be necessary to foster growth.
Haven’t written a business plan? This article from the SBA contains everything you’ll need to include in your business plan, as well as a template.
#2 The Problem: Lack of Business Experience/Industry Knowledge
You have to be a lot of people to run a business: the marketer, the salesman, the office assistant, the bookkeeper, the shipper, etc. Add that to the face that you have to understand the industry you’re entering, its trends, and the skills required to offer your product or service.
The Jumpstart: Educate yourself and find a mentor!
Read all the books you can get your hands on that pertain to your industry. Research all your competitors. Take some classes at your local college or university. Most importantly, talk to people who have been successful in your industry and find someone willing to share with you what they did that made them successful.
Here’s a great article from Inc.com on how to choose a mentor who’s right for you.
#3 The Problem: Poor Money Management
You have to be able to survive for at least two years without income when you’re starting a small business, since businesses are often slow to get off the ground. Once your business is up and running, you need to prepare a realistic budget and keep accurate records and financial controls.
The Jumpstart: Keep track of everything!
Once you’ve set up a budget, stick to it! Keep track of every penny that comes into and goes out of your business and what it was for. (May we recommend our Tax Tracker app to help you keep up with your spending?) Make an expense report each and every month, and review it to see where you can make positive changes, and don’t forget to file your sales tax and other necessary filings. And don’t spend company money on personal expenses.
If you don’t know how to do any of this or don’t have time, it’s important to consider hiring an accountant. This article on our blog explains why hiring an accountant can be helpful to your small business. And your accountant’s fees are tax deductible. We highly recommend Rockstar CPA; we think they’re pretty terrific.
#4 The Problem: Poor customer service
At one time or another, we’ve all had a bad experience with customer service. Once you have a customer in your store, it’s important to keep them there. Making sure your customers are happy leads to repeat and referral business. And happy customers spend more money over time than unhappy ones.
The Jumpstart: Pay attention!
Listen to what the customer wants, and make sure you provide prompt service when addressing problems or concerns. Make sure you keep your work and constantly ask your customers for feedback. Want to learn how to treat your customers well without giving away the store? This post on customer service best practices can help.
#5 The Problem: Ineffective Sales and Marketing
Learning the basics of sales and marketing techniques is an important aspect of running a business. Keeping track of what works in your industry—and what doesn’t—is crucial to determining how to create a sales and marketing plan. Every business owner needs at least a basic concept of sales techniques.
The Jumpstart: Educate yourself!
If you know virtually nothing about sales and marketing, it’s time to educate yourself, and quick! Social media is rapidly becoming the leading marketing tool in many industries, so staying up on current trends is important. Make sure you’re keeping track of successes and failures and fine tune your techniques based on your findings.
1 year ago
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