10X Growth
“10X” the secret business growth mantra!!
January 4, 2018
5 Financial Habits
5 Financial Habits
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Why do Small Businesses fail?

Why do Small Businesses fail?

Why do Small Businesses fail?Over the week-end I happened to visit a Japanese garden. It was a vast garden with many plantations, artistic designs, landscapes and water bodies. It was otherwise a soothing experience, except for when I noticed few bonsai trees. Personally I don’t like bonsai trees as I feel it cruel to curtail someone’s natural growth for our personal pleasures.

In the ensuing musings my thoughts drifted to business world & suddenly I realised bonsai exists in the business world too. Business owners trim their businesses, they end up keeping those small what otherwise has inherent potential to become conglomerates. So sad, they bonsai their businesses!!

Many businesses are craving for growth, they have tremendous potential in them but the owners are stubborn. They don’t provide right ingredients, develop conducive environment and pay required attention. It is strange to see this happening because the business is their own offspring, their own creation yet many business owners deprive the business it’s natural growth. It’s almost like forcing the kids not to fully grow and blossom because the parents want them to become what they think is right.

Growth is not just more money as few think. It’s also much more than just higher sales. It is growing to offer a basket of best products and services, it’s growing to serve client needs across different geographies, it’s growing by creating more jobs and having filed number of patents and much more…

People often ask Why do small businesses fail? Or How can small businesses compete successfully with larger businesses? Here are three key areas that small business owners neglect; focus and you can take your business to a global scale & prominence.

1. Lack of Vision:

One of the key reason why most small businesses remain small is the owners lack passion & are unable to see the big picture. Their business view is full of problems and never about possibilities. No wonder what they see is what they get. Problems they struggle with, problems that don’t allow them to think about exponential growth. They are so engrossed with operations that they seldom have time to think differently about their business. They fear that more growth means more work for them as they neither think of hiring professionals nor do effective delegation. Working under constraints doesn’t allow them to acquire higher skills like structured management acumen and leadership qualities. Read here to know more about how can they build growth hunger and think differently.

2. Lack of focus:

Most small businesses do incremental planning. They don’t think of long term strategies. As such many of them quite often get distracted by new ideas. Instead of focusing first on making one line of business  strong & powerful, they chase something that is currently hot in the market. They don’t focus to make their products or services superior. They don’t focus on right customer segments per product or service that can create value for money. They don’t focus on cost optimization or attracting right talent. Instead of developing right capabilities to scale the business, most of their time & energy goes into just lead generation. What they fail to understand is while lead generation can fulfil their current revenue needs, it can not help in scaling up their business. They need to focus on creating new capabilities, focus on hiring right talent, establishing right systems and structures.

3. Lack of timely investment:

Many business owners are unable to distinguish between and expenditure and investment. For them investment is only when they spend for production for plant and machinery, rest all is expenditure. Even when it comes to machinery, they don’t realise replacing existing machinery with latest technology highly automated machines can significantly increase their production, quality at lessor overall cost that today. They consider spend on IT as expenditure and not as an investment that can increase their team collaboration & efficiency, enhanced customer experience & can generate higher sales and profitability through better decision making. Finally spending on branding and marketing that can increase the visibility, recall value,  credibility and create future ease of sales, is not even a wise expenditure as they can’t see direct co-relation of money spent with increased sales.

Every business has a potential to grow. It is essential for the business owners to ensure they don’t trim it’s growth because of their negligence, lack of knowledge or misconceptions. They should drop the fear, anxiety and adopt modern management techniques, unconventional strategies & methods that can help their business come out of current state and get on to the path of accelerated growth.

Stop trimming your business, let it grow to its full potential.