The Basic Challenge of Small Businesses

According to the SBA, over 50% of small businesses fail in the first five years. Why? What goes wrong?  Our experience does not indicate that the specific reason for failure is economic conditions, government regulation or lack of outside financing. 

What we have learned in our work with small businesses for over 40 years is that often  small businesses fail because the owners do not have the management skills, functional skills or business acumen to keep the business going.

Just about every list of reasons small businesses fail includes things like; poor planning, poor marketing, poor accounting, risk averse owner, operational mediocrity, operational inefficiencies, dysfunctional management  lack of a succession plan, etc.  What it all boils down to is inability to handle the day to day operations of a business while simultaneously keeping one's eye on changing business conditions and planning for the future. 

 Critical functions need to be covered so that a business can grow with a positive cash flow in a way that enables the owners to have time to monitor results and plan for tomorrow.  These key functions are sales generation, sales fulfillment, customer relationship management and daily accounting of business activity.  When it is not possible to hire support staff and provide them with the tools necessary to cover every critical function consider business process outsourcing.

The primary funding of a small business needs to come from the profit it generates so, it is critical to have a sales and marketing team in place and for them to be supported by a process that responds to the activity generated.  All businesses MUST have a professional process for responding to this ales and marketing activity.  In this day of instant communication, a prospect is not going to chase your down to get information they need to make a decision.  Answering machines, relays to cell phones, robo responses are all barriers to building trust with a potential customer and closing sales.  Customers want information delivered by a person in a professional manner and you want a record of that contact which will tell you what customers need, when they need it and how much they are willing to pay.  

If any of this seems to apply to your situation, consider outsourcing your sales and marketing support function.  There are many fancy names for it; Lead Management, Customer Relationship Management, Sales Coordination, etc.  Just make sure someone well trained answers your phone, e-mail and text messages promptly (24/7/365) and professionally, satisfies the caller, records the data created by the communication and takes action which will lead to a sale.