Avoid These Mistakes to Succeed in Your Small Business
Small business owners face many fears in today’s crazy economic climate. Fears of failure, change, risk, not being good enough, and letting others down are common.
Fear of failure tops the list for most entrepreneurs, with good reason. The high rate of small business closings is nothing new. Small businesses only have a 50% chance of survival past five years.
Don’t be discouraged by the high rate of business failures. Many well-known entrepreneurs have failed more than once before finally achieving their dream. The key to their success was learning from their mistakes and not giving up.
“It’s fine to celebrate success but it is more important to heed the lessons of failure.” ― Bill Gates
Learning from mistakes others have made can provide you with the opportunity to grow your small business the right way.
Don’t be a micromanager. Steve Jobs was once an infamous micromanager. After leaving Apple for the first time, he started a computer company, NeXT, where his micromanagement style is said to be one of the reasons NeXT failed. However, Jobs learned from his previous mistake and led Pixar to success, followed by his return to Apple.
No small business owner can do everything by themselves. Don’t try to be the innovator, salesperson, marketer, IT manager, or accountant alone. If you have employees, hire quality people you can trust to take over some of these functions. If you are a solopreneur, outsource wherever possible. Having the help you need will allow you to spend more time growing your business.
Don’t try to target every market. Remember KMart? KMart’s serious problems started in the 1990s as big box retailers became more popular. Instead of focusing on how to handle direct competition, KMart decided to branch out to different retail areas. KMart’s strategy was to be bigger, regardless of its target market. KMart acquired Borders booksellers, Office Max, Sports Authority, and Builders Square home improvement stores. While distracted by its acquisition binge, KMart neglected its foundational business and customers. By 2002, KMart went into bankruptcy.
Focus on your core business and target market. Bigger does not always mean better. Trying to do too many unrelated ideas at once will stretch your resources and likely weaken what you’ve worked so hard to build.
Be true to yourself. Coke and Pepsi are well-known adversaries in the Cola Wars. Pepsi launched its Pepsi Challenge in 1975, inviting consumers to do a blind taste. The taste test results showed Pepsi had the edge over Coke with consumers. Coke’s knee-jerk reaction was to launch New Coke, a new formula that was a terrible idea and did not last long.
It’s easy to be distracted by your competitors’ actions or offerings. But your customers or clients frequent your business for a reason. Don’t lose sight of what makes you unique and separates your business from competitors.
Stay Focused on the Long-Term. Circuit City was a popular retailer in the 1980s but did not survive past 2009. Its decline started when the company decided to improve costs by laying off long-term, higher-paid hourly employees and replacing them with lower-paid workers without experience. Customer service quickly went downhill, and the company could not recover.
Paying attention to your margin and controlling costs are always good ideas. Be mindful of how you choose to control costs and the potential effects that could have on your business down the road.
Know when to Pivot. During the 1990s, Blockbuster was the most popular video rental chain worldwide, with over 9,000 stores. Not many people know that in 2000, Netflix offered to sell its video by mail service to Blockbuster for $50 million. Blockbuster was too comfortable with its dominance in the video rental space to see how rapidly consumers changed how they watched videos. It would be several years later before Blockbuster decided to react and start Blockbuster online. But the company had invested too heavily in its old business model and could not move quickly enough to adapt to the new market trends. Blockbuster went bankrupt in 2010 and now has only one store in Bend, Oregon.
Stay in tune with changing trends in your market and technology. Review your strategy regularly and closely monitor your KPIs to stay on track with your business growth. Don’t make the mistake of assuming things will never change.
Need help with your business strategy? Reach out to [email protected] today, and let’s discuss how I can help you with your small business!