Why do Small Businesses fail?

I happened to visit a Japanese garden a few days back. It was a vast garden with many plantations, artistic designs, landscapes and water bodies. It was 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 realized bonsai exists in the business world too. Business owners trim their businesses, they end up keeping business small, what otherwise had inherent potential to become conglomerates. So sad, they bonsai their businesses!!

Many businesses are craving for growth, they have tremendous potential in them, but many time business leaders are the bottleneck. 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 on improving these and you can take your business to a global scale & prominence.

1. Lack of Vision:
   Inability to see the big picture and lack of passion are the key reasons for lack of growth and eventual failure of most small businesses. A business view which sees only problems and never the possibilities is doomed for failure. No wonder what you see is what you get. Many business owners are engrossed in problems they struggle with. These operational problems don’t allow them to think beyond the daily operations. They are so engrossed with operations that they seldom have time to think differently about their business. In fact, sometime business owners fear that more growth may mean, more work for them. As they neither think of hiring professionals nor do effective delegation. Too much work load 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:
   My experience of working with small businesses tells me that most small businesses do incremental planning. They don’t think of long term strategies. Many small business often get distracted by new ideas. I often see business chasing something that is hot/ lucrative and new in the market. Instead of focusing on the long term strategy and making their line of business strong, ensuring their products/services superior and differentiated; many small businesses tend to launch newer products or introduce new services. In long term introducing new products or services tends to be more resource intensive. The focus of any growing business has to be on targeting the right customer segments, with the right products or services, that can create value for customers and money for the business. Unfortunately, our work with many small businesses tells us that instead of developing right capabilities to scale the business, most of the management time & energy goes into activities like lead generation or negotiations. What many businesses fail to understand is that, although lead generation can fulfill their current revenue needs, it cannot help in scaling their business. The focus needs to be on creating new capabilities, hiring right talent, establishing right systems and structures. A business consulting firm like In-Unison can help business get the focus right and also help in course correction if required.
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 realize replacing existing machinery with latest technology highly automated machines can significantly increase their production, quality at lessor overall cost than today. Even today many business owners consider spend on IT as expenditure and not as an investment that can increase their team collaboration & efficiency, enhance customer experience & can generate higher sales and profitability through better decision making. Finally spending on branding and marketing is a far-off thing for many businesses. They do not realize the importance of branding and marketing to increase the visibility, recall value,B credibility and create future ease of sales. Every business has a potential to grow. It is essential for the business owners to ensure they don’t trim business growth because of their negligence, lack of knowledge or misconceptions. They should drop the fear, anxiety to adopt modern management and use help from external experts. Experts bring in fresh approach and expertise that can help your business to 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.

At In-Unison, we work with business of varying sizes to help them break their constrains, gain a vision and achieve exponential growth.reach us no +91-841-103-1818