The 7 Deadly Sins of Small Business Failure

Did you know that within the past month alone, 350 brand new businesses opened up in Virginia Beach?   Portsmouth issued licenses to 74 new business owners, Chesapeake issued another 51, and though  Norfolk’s numbers aren’t readily available, we can safely conclude that 500+ new businesses were launched in the area in the past 30 days.

Which is a very typical month, I might add.

There are 26 million small businesses in the United States; they’re the engine that creates jobs and drives our economic growth.   Unfortunately, the failure rate of new businesses is high.  In fact, the typical ‘start up’ business  is no longer in operation 5 years later.  (For exact data, look here or here.)

But here’s the good news:  You and your business don’t have to become a statistic!   Whether you’re starting brand-new… or just starting over…  you can build a profitable business if you know The Seven Deadly Sins of Small Business Owners, and how to avoid them!

THE FIRST DEADLY SIN

No Written Business Plan.  I’ve seen it over and over again…  A contractor wouldn’t dare to think about starting a construction project without having a blueprint to work from.  But he’ll rush ahead, take the plunge, go out and get a second mortgage on his house, and open a new business–without even sitting down to write out a blueprint for his business.

I’m not talking about some fancy, formal 50-page typed document filled with MBA jargon, color graphs and spreadsheets.  By “business plan’, I simply mean a straightforward statement, on paper, of your business idea, who it will serve, why it will bring value to future customers,  and how much money (top-line and bottom-line) you expect to see over your first months in business.

Most entrepreneurs think they don’t need a business plan until they’re looking for a bank loan or seeking partners.  That’s stinking thinking.  Writing a business plan gives you a chance to thoroughly evaluate your new business concept inside and out.

Putting your ideas down on paper forces you to spend some time in the weeds of detail.  Some put it off because it’s not always easy to project what the future will look like.  Sometimes it can feel like you’re pulling information out of the air — especially when it comes to the numbers.

But you don’t have to go it alone.  You will find plenty of people and resources available to help you.  Here’s a couple approaches I took personally which I highly recommend to you.

  1. When I first started my business, I connected online with a number of highly successful owners outside of my local market.  We first connected via online forums or public discussion groups; this led to personal contact via email and phone.  They didn’t see me as a competitor, and I was surprised to learn that many successful people love to help others become successful too. Taking this approach can be a great way to ground your projections and expectations in reality.
  2. Another approach is to find the “go to” experts in your business category, and take advantage of their training systems and podcasts.   (In in the Heating & Air Conditioning field? Go here . Are you a chiropractor? Listen here.)  You’ll discover high-profile industry experts who’d love to help you — although for a fee.  I chose to go this route as well, exchanging my money for the opportunity to learn; the knowledge I gained was worth the investment.

Those are the roads I’ve traveled, but there’s also SCORE and other resources available  (too many to list here)  that can help you build a business plan for success.

THE BOTTOM LINE

Regardless of whether you run a small, part-time business from home, or direct a large company with several offices, you’ll find it difficult to operate without a simple, written, effective business plan.

ANCHOR ON THIS:   Writing a business plan will help you see the potential strengths and weaknesses in your enterprise, uncover potential pitfalls, and — most importantly — think up ways to avoid them before they actually happen.   And that, in turn, will keep you and your business from becoming just another ‘statistic’.

 

Posted in Small Business.

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