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5 Reasons Small Businesses Fail and What You Can Do to Change That

It’s not really a secret to anyone who has any experience in the world of business that most small businesses either fail or struggle just to stay afloat most of the time. That doesn’t mean that all fit into those 2 categories and that doesn’t mean that your business has to fail or struggle. What it means is that there is a chance to learn from the ones who do fail or struggle and take that learning and integrate it into your business so that you can avoid those trappings that so many others fall into.

Let’s take a look at 5 reasons why small businesses fail and what you can do to change that for yourself and for your personal enterprise:

1. Many small business owners don’t plan for success, they plan for mediocrity.

What do I mean by this? Well, if you talk to small business owners, many seem to fall into the category of just trying to stay afloat because that is what they focus their planning on. They don’t focus their plans for success as much as they are trying really hard to avoid failure. You don’t want to do that. When you only focus on avoiding failure, mediocrity is almost always the inevitable outcome.

Of course you want to have plans in place to avoid failures and to handle any challenges that come along. At the same time, though, you also want to allow yourself to break free from that thinking for a little while and do some planning for success. That means that you are going to have to think big and that can be hard to do at first. However, if you get over that initial stage where it seems hard, you might find that it becomes easier and the ideas start to really flow.

2. A lot of small businesses fail because they don’t take customer feedback as seriously as they should.

This is crucial. Customers who are happy and feel like they are almost a part of your “team” in a sense come back time and time again. In order for that to happen, you have to be willing to take their feedback seriously. You might be surprised at what you learn when you start to take in feedback and use that when making decisions.

Don’t get me wrong, not all customer feedback is useful. Some customers are just angry in their own lives and they will take any chance that they can to vent. However, most are not really like that and if you are open to hearing what they have to say, customers can end up serving up some of the best ideas to help increase consumer satisfaction and even how to sell more of your products or services to them.

3. Small businesses fail when their owners look at it as a hobby.

It can be a hobby in some sense of the word as in, it is something that you like to do and you are passionate about it. However, when you treat it as though it doesn’t matter all that much, it is not going to grow the way that it should. Look at it as a business and one that you enjoy being in and most of the time you’ll find that things begin to change for the better.

Now, some people get the wrong idea and they see a picture of a stressed out business owner who only thinks about business and nothing else. That doesn’t have to be the case at all. You can brainstorm ideas that help you grow without being stressed out and you can think about other things as long as you set aside time each day and each week to have a serious look at things.

4. Small business struggle and fail when their employees are not passionate about the business.

You want to have passionate people in your business, people who enjoy what they are doing and don’t dread coming into work. You really can’t expect to have a lot of success if most of the people working for you don’t really like their job.

A good way to deal with this is to hire people who are passionate and another good way to deal with this is to be an example that they can look to. It’s hard for an employee to be passionate about what they do if they see the owner looking like they have little to no passion themselves.

5. Small businesses struggle and fail when they don’t take their marketing seriously.

You can have the better mousetrap and still fail to stay afloat, much less thrive, if you neglect the fact that you have to market your business. It might not be the thing that you are most passionate about just yet, but when you see the results of effective marketing, it will probably inject a little bit of enthusiasm as the sales and orders come in.

The reality is, the business with the better product or service doesn’t always win. A lot of the time, it is the business with the better marketing that does. A good example of this is when you look at movies. The best movies from a story and plotline point of view don’t do that well at the box office when there is little to no marketing push behind it. Yet, a generic movie with a predictable plotline and great marketing behind it will often lead the pack at the box office. Marketing makes a huge difference.

Small businesses don’t have to fail. They are the lifeblood the economy, especially at the local levels and they should thrive. You have to take it seriously, be passionate about what you are doing and you have to be willing to market your business. You can’t expect the world to just find you, you have to put yourself out there and in front of your ideal customer.