According to the Kauffman Index of Entrepreneurial Activity, over half a million businesses are started in the United States every month, which equates to more than 6.5 million new businesses each year. The U.S. Small Business Administration reports that just around 50% of them survive five years. Those might look like gloomy numbers but they provide a valuable learning opportunity for small biz owners. Namely, what were the failed businesses doing that led to their demise and what are the successful businesses doing that keep them afloat? We looked at some of the most important factors and compiled a few of them here.
1Managing Your Vision
Create a realistic vision, own it fully, communicate it to employees clearly and regularly, and keep pushing toward it until it happens. As a small business owner, it’s up to you to decide what your company will be and it’s important to understand that, in all likelihood, you care about your business more than anyone else will. You need a clear vision that drives your tasks every day, informs your decision-making process and keeps your employees motivated and unified behind a goal.
It’s important to stay educated; about the market you’re in, about how to improve efficiency, and about how to run the day-to-day operations of your business. For some, this might just mean reading the trade journals or staying abreast of trends through business blogs. For others, it might mean taking fundamental business courses or even pursuing a degree. The increased popularity and proliferation of online degree programs has made it easier than ever for business owners to take charge of their education. Classes can be taken whenever and coursework can often be completed when it’s most convenient for you, whether that’s in the early morning hours, late at night or in-between meetings.
3Take Care of Yourself
The site Fundera reports that 70% of small business owners log over 40 hours a week, with 19% working more than 60 hours a week. 89% reported working on the weekends and 81% said they worked nights. Part of this is because of the myth of the entrepreneur whose passion drives them to work 20-hour days and never sleep. Here’s the problem with that myth — you need a clear head to make sound decisions and manage your business and that means 8 hours of sleep and reasonable hours working. It also means taking care of yourself mentally and physically; eating well, exercising and relaxing through yoga or meditation is as important as logging hours at the office.
4Learn to Delegate
This ties into the previous point and it’s also a core principle of leadership. As much as you might want to, it’s a dangerous trap to start micromanaging everything in your business. You’ll burn out quickly and your employees will feel like they can’t do their jobs. Learn to find the right people, communicate your goals to them and then let them do what you hired them to do. This will require letting go of your control to a degree and that’s a good thing. It can give employees the freedom to excel in their positions and take ownership of the success or failure of the business and that’s all the impetus most people need to shine.
5Prepare for Change When Things Are Good
When the bills are paid, the money’s coming in and the company is growing, it can be tempting to put things on cruise control. But you don’t want to wait for the storm to come to make improvements. After all, you wouldn’t fix the roof when it’s raining, right? This doesn’t mean fixing what’s not broken, but it does mean researching trends in the market, taking a hard look at your company’s preparedness and making adjustments where they’re needed. Those small tweaks now can make for smooth sailing in the future.
6Do Regular Spring Cleaning for Your Business
Just as we de-clutter our lives, our businesses need a good spring cleaning every now and again. Companies can develop bad habits, take on too many responsibilities, branch into areas that don’t fit the vision, and even accumulate too much physical “stuff.” Take a step back and ask yourself, “Is this serving my business?” If the answer is no, let it go, whether that means getting rid of a worker who’s not doing the work, a fussy client that’s a drain on the business or an office space that’s not congruent with your company’s values.
7Hire Attitudes and Train Skills
Many small business owners hire anyone who seems to have the skills they need and that can be a mistake. Yes, you definitely need employees who can do the work, but it’s more important to get employees with good attitudes. Employees with bad attitudes can ruin the company culture; better to hire ones with the right attitudes and then get them the training they need.