Tin or aluminum is the traditional way to celebrate a 10 year anniversary. That doesn’t sound very impressive, does it? What’s impressive is getting your small business past the 10 year mark of success. Only around 30% of businesses last that long, keep reading to find out how you can.
Tin or aluminum is the traditional way to celebrate a 10 year anniversary. That doesn’t sound very impressive, does it? What’s impressive is getting your small business past the 10 year mark of success. Only around 30% of businesses last that long, keep reading to find out how yours can.
Why do Small Businesses Fail?
The first step to ensuring your small business succeeds is to learn how you could fail. Only then do you have the knowledge and power to avoid these mistakes. Here are the most common reasons why small businesses don’t last 10 years.
Cash flow problems. By far the most common reason, 82% of small business owners say they failed because they experienced problems with cash flow. It is important to do a cash flow analysis and keep on top of your finances.
You probably didn’t become an entrepreneur because you love accounting. You have the vision, drive, and ambition to make the world a better place through your business idea. However, money is what will sink your business or float it to the top. Always be working on your financial literacy, keep physical records, know where every dollar is being spent, don’t focus only of your Profit and Loss statement (PnL), cut expenses where you can, and prioritize your money management. You won’t regret it.
There’s no demand for your product or service. Around 42% of businesses fail because there is no market need. It’s a hard lesson to learn that not every idea is a good one, and people might not want what you are offering.
It’s not smart to open an ice cream stand in the middle of December or across the street from a diabetic clinic. How do you make sure there’s enough demand for your business to make money? Do a lot of research into your target audience and community. Your business should solve a common problem that consumers have.
You don’t have the right team. About 23% of businesses fail because they don’t have the right balance of human capital. Nobody is an expert in everything, whether you are a sole proprietor or you have a business partner, so it’s important to hire good employees that can all contribute to your business’ success.
Don’t stop with the hiring process. Encourage and help your team grow with your business. Invest in training, provide support and opportunities, and lead by example. The only thing worse than incompetent employees are ones that can’t work together as a powerful team.
There is too much competition. Although a seemly small percentage, 19% of businesses fail because they lose out to their competitors. Market competition is healthy because it encourages innovation, humility, and hard work. But in any competition, there will be a loser who unfortunately did not make it.
If you open that ice cream stand on the beach in the summer next to three other ice cream stands, it is very likely that you will struggle. Identify your business’ SWOT and use that to find the best location, direction, and strategy to avoid losing out.
Don’t believe us? Listen to small business owners who have succeeded – they have advice they want you to hear.
Trust in Your Business, Even If Banks Won’t
Here at Opportunity Fund, we want to see your business thrive. It is our mission to help underbanked entrepreneurs like you get the working capital you need to see your business hit that magical 10 year anniversary.
Contact us today to get a small business loan that will help you for the next ten (and hopefully more!) years.
For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or firstname.lastname@example.org. For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or email@example.com.
Loans are subject to credit review. Additional documentation may be required for credit approval. We are an Equal Opportunity Lender. Loans will be made or arranged pursuant to California Department of Corporations Finance Lenders License #6050609.
Opportunity Fund is tackling economic inequality so that hard work and perseverance means a shot at getting ahead, not just struggling to get by. Our programs are supported by a community of donors and investors whose contributions help to fund small businesses, support college students, and build stronger families and vibrant neighborhoods. Since 1994, the team has deployed $600 million and helped 20,000 families earn, save and invest in their own futures. Opportunity Fund has earned a 4-star rating from Charity Navigator, America’s largest independent charity evaluator, for our commitment to accountability and transparency.