There’s an ominous saying that “nearly half of small businesses fail within their first five years”. Those that even survive the past five years hardly scale into something larger. From poor planning to lack of funds, and even weakness in adapting to the market, there are lots of reasons why small businesses fail or at best remain small.
As a small business owner who has spent time running a business but hasn’t scaled into a larger business, it’s possible that you’re doing some things wrong. Here are 6 reasons why your small business is still small:
Weak Finance Management
If you’re into business, you know that your capital won’t last forever. So, part of your goals in business is to make enough profit to cover your capital, running expenses, and actual profit which can be saved for later. But this is a major area most small businesses fail in. Oftentimes, business owners can’t properly manage their business finances, and so there are often unnecessary expenses that eat into the capital and operational budget. In the end, the business is left with little to no saving profit. If your business is barely making enough money to continue operating, there’s no way it’ll grow. Why? You need money to grow your business, and unfortunately, you don’t have that. To break free from this, you should assess your finances, cut down on unnecessary expenses, and work towards making an actual profit.
Poor Marketing
There’s an unspoken rule in business, and it’s that “you’re first patronized based on how much you promote your business”. No matter how great your service is, if you don’t let people know about it, then nobody will patronize you. Unfortunately, lots of small businesses depend on a small circle of customers, e.g. a store in the neighborhood. As a result, there’s really no investment in marketing, and that ultimately keeps such small businesses in a loop. Although it’s great to start from where you are, it’s more important to broaden your horizon and reach out to potential customers far and wide.
In an era where you’re connected to the rest of the world with just your phone, you can’t afford to move your business online. If you can’t spend money on running ads online, you can opt for free content marketing. All you need to do is to tell your story online. Create a simple website, blog, or social media account, and post content about your business.
Lack of Business Vision
There are business owners who actually have no plans of growing their businesses. If your goal is to engage in retail sales, that’s great. But how about trying to grow your business further and having more retail branches of the same business?
Before you start a business, think about where you hope to take it in the next 5 to 10 years. Once you have such a vision, you’ll find it easier to focus and grow your business. Ultimately, a lack of vision will make it hard for your business to grow.
Failure in Assessing the Market
Oftentimes, business owners establish businesses out of the excitement of having a potentially profitable business idea. In business, having a business idea is only the first step – it doesn’t guarantee that you’ll even launch your business successfully. There’s one point where most startups and small businesses miss it, and that’s in market analysis.
Before you start a business, you need to critically analyze the market, and determine your competition and potential customer behavior. When you know the market, it’ll be easy to launch and ride the market waves. Your business idea or solution has to harmonize with the actual market’s demand before you can launch and grow your business.
Business Adaptability to Market Fluctuations
There’s literally no market that’s 100% stable. Just as change is constant, there’s a 100% likelihood that the market you’re in would experience a downwards fluctuation. Being able to adapt to the changes or fluctuations in the market is essential for sustaining and growing your business.
Think about it this way; you run a business that sells plastic cups, and suddenly there’s a reduction in market demand. Why? Customers are opting for eco-friendly paper cups. If you’re unable to adapt your business to start providing paper cups, you’ll most likely run out on sales. So it’s either you’re stuck in being a small business or you completely fail.
Bad Location or Accessibility
Visibility is an important factor in business growth. There’s a reason why stores are located in heavily populated areas. It’s so they can leverage the population size to drive sales. If your business is dependent on population, then you need to plant it where more people can see and patronize you. Also, you have to factor in accessibility when choosing a location for your business. If the road leading up to your store or office is too complicated or in a poor state, you’ll most likely have little sales. And when sales are low, there’s definitely going to be no growth for your business.
Conclusion
If you’ve been running your business for a while, and you’ve tried scaling it to no avail, then you’re probably affected by some of the reasons mentioned above. Your small business doesn’t have to join the train of failed businesses.
Evolution Business has the experience and expertise necessary to help small businesses overcome these challenges and grow. We are a full-service marketing agency that has the experience and expertise necessary to help your small business grow. Contact us today for a free consultation and let us show you how we can help your business reach its fullest potential.
