Help For Struggling Small Business Owners – It is often said that more than half of new businesses fail in the first year. According to the U.S. According to the Bureau of Labor Statistics (BLS), this is not necessarily true. Data from the BLS shows that about 20% of new businesses fail in the first two years of being open, 45% in the first five years, and 65% in the first 10 years. Only 25% of new businesses reach 15 years or more. This statistic has not changed much over time and has been fairly consistent since the 1990s. Although the odds are better than popular belief, there are still many companies that go out of business every year in the United States.
According to the BLS, entrepreneurs started 843,320 new businesses in the year ending March 2021. From historical data, we can expect about 168,664 of these businesses to fail in the first two years. With the right planning, financing and flexibility, businesses have a better chance of success. We’ll go over some of the biggest mistakes startups can make and find out how you can improve your chances of success.
Help For Struggling Small Business Owners
So you’ve always wanted to open a real estate agency, and you finally have the opportunity to do it, but your desire to open the agency blinds you to the fact that the economy is in a down housing market and the area you want to work in is already saturated with agencies, making it very difficult to break into. This is a mistake that will result in failure from the start. You need to find an open or unmet need in a market and then fill it instead of trying to push your product or service. It is much easier to satisfy a need rather than create one and convince people that they should spend money on it.
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A solid and realistic business plan is the foundation of a successful business. In the plan, you will outline achievable goals for your business, how your business can meet those goals, and possible problems and solutions. The plan will find out if there is a need for the business through research and surveys; it will find out the costs and efforts needed for the business, and it will outline strategies and timelines that should be implemented and met.
Once you have a plan, you should follow it. If you start doubling your spending or changing your strategies capriciously, you are asking for failure. Unless you’ve discovered that your business plan is overwhelmingly flawed, stick to it. If it is incorrect, it is best to find out what is wrong with it, fix it and follow the new plan rather than changing the way you do business based on quick observations.
The more mistakes you make, the more expensive your business will be and the greater the chance of failure. You may also be called to pivot when market conditions change drastically and negatively affect the chances of success based on the original business plan. In this case, you go through your plan again and edit it completely based on the decided pivot.
If you have started a business and things are not working out, and you have little capital and a struggling business, you are not in a good position to ask for a new loan. If you are realistic in the beginning, you can plan to start with enough money to get to the point where your business is up and running and money is actually flowing in.
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Trying to stretch your finances in the beginning could mean your business never gets off the ground, and you still have a lot of money to pay back. Lean management strategy is justified in this phase especially but can also be applied after this phase. Try to think of multiple channels for funding and funding. Get educated about this area and be creative and look for alternative sources of funding.
A bad location is self-explanatory if your business relies on location for foot traffic. Equally dangerous, however, is a poor presence on the Internet. These days, your presence on the Internet and your strength in social media can be as important as your business’s physical location in a shopping district. An online presence will let people know they can give you their business, so if the need is already there, the accessibility and visibility of your business is the next important step.
This is similar to marketing. Not only do you have to make sure that marketing reaches people, but it also has to reach the right people. So make sure the type of marketing matches the target audience you want to reach. Large billboards may not be the way to go for an internet business, just as online ads may not be the way to go for a heavy construction company. If the need is already established, make sure you reach the audience that needs your product or service.
Once you’ve done the planning, established your business, and gained a customer base, don’t get complacent. The need that you fulfill may not always be there. Monitor the market and know when you may need to change your business plan. Staying on top of key trends will give you plenty of time to adjust your strategy so you can remain successful. One only has to look at the music industry or Blockbuster video to know that successful industries can undergo massive changes.
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Now that your business is established and successful, it’s time to expand, but you need to treat the expansion as starting from scratch. If you are expanding the reach of your business, make sure you understand the areas and markets you will now be reaching. If you’re expanding the scope and focus of your business, make sure you understand your new products, services, and target consumers as much as you do your current successful business.
When a company expands too quickly and is not as careful with research, strategy and planning, the financial drain from the failed businesses can sink the entire company.
Although the business failure rate in the first two years is around 20%, it does not mean that you have to fail. Through research, planning and flexibility, you can avoid many of the pitfalls of a new business and be part of the 25% that make it to 15 years and beyond.
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Matt “Kush” Kusher stands outside his KUSH restaurant in Miami on April 29. Kusher and other restaurant owners are struggling after being denied money from the first Paycheck Protection program and need help from a second rollout to keep their businesses open. Charles Trainor Jr./Miami Herald/Tribune News Service/Getty Images
Months after Congress created the Paycheck Protection Program (PPP) in an effort to support small businesses during the Covid-19 pandemic, people are still confused, and even angry, about the ambitious, unprecedented experiment.
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Take what happened to Mark Fisher Fitness (MFF), an LGBTQ-friendly boutique fitness studio based in New York. Because it received a PPP loan in April, it was able to rehire the 28 employees it laid off in March when the coronavirus crisis hit and its places ran out. But for the loan to be forgivable, MFF had to spend the money for two months, mostly on salaries.
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“It gave us the opportunity to keep the whole staff for a period of eight weeks and keep that sense of community and to continue our great unicorn experiment to bring health and hotness to the masses,” said Andrew Cole, chief executive officer at MFF.
But the postponement of the PPP loan did not last long. Although MFF has transitioned to online courses for the foreseeable future, it has again had to lay off most of its staff and is closing one of its two locations permanently.
Still, compared to other small businesses that applied for PPP, it was lucky to get a loan at all. Many small business owners — especially minority-owned businesses — say they were denied loans of even a few thousand dollars, while larger companies like the Los Angeles Lakers and Shake Shack were awarded millions in loans. (In the face of public backlash, several of these larger companies eventually returned the money.) Others say the loan amounts they received were too small to help at all. And a lack of transparency with the program has fueled misconceptions about what the PPP was meant to accomplish in the first place.
The controversy surrounding PPPs, which support companies with 500 or fewer employees, has a lot to do with it
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