Ep 21 – 25 Reasons Local Small Businesses Fail

Episode 21 – The Local Small Business Coach Podcast Today's Topic: The 25 Reasons Local Small Businesses Fail   In today's episode: We discuss the top reasons that local small business often fail. By knowing what causes small business failure, you can react quickly to get back on track   Shownotes: Today we are going to take a look at 25 reasons that local small businesses fail. First, I'd like to share a couple of statistics. Did you know that it is widely held and understood that 50% of small businesses will fail within 5 years and that 90% of small businesses will no longer exist in 10 years. That means that if true, 9 out of 10 of you will no longer be in business in the next 10 years.  That is crazy.   Did you start your local small business thinking would be a statistic? Heck no.  You went into it with high hopes and swearing that you would defy the odds.  My goal is to help you do that! The best way to avoid failing is to know what the most common pitfalls, local small business owners make. Now, before we dive in, we must acknowledge that many of you are probably falling victim to any number of these items right now. Our mission today is to recognize it and put a plan in place to right the ship. Since we have a lot to cover, let's dive right in. Oh, before we do, please know there is no rhyme or reason to the order   Trying to Do It All If your goal is to remain small and only do a few small jobs here or there, then this might not be an issue for you, however, for most of us, we want our business to grow large enough to not only pay our bills, but we also want it to produce enough profit to fund our future retirement. In order to do that, odds are you will need help at some point to keep up with the additional business. Maybe it is to do the actual work, to help the customer or maybe it is to run your office management or bookkeeping or maybe someone to do your marketing. When you are doing it all, then you are 100% guaranteed to start dropping some balls. Something will have to give.  Sure you might be able to hang on 7 – 8 years, but you are the highest risk at that 10-year mark. You hold on as long as possible until it becomes too much.   Not Adjusting to the Changes in the Market Over the course of any 10 years, the odds are strong that there will be lots of changes in the market place. Technology will change, attitudes will change, what people find to be important will change. Their wants and desires will change. I'm reminded of this whenever I show homes. What was popular in the 70s is different than what was popular in the 90s. Heck, in my small town, most of the homes are 10 years old and folks already feel they hate what was so popular in 2006.  Think about when the market shifted from a cash basis to credit and then debit. A business that didn't take cards due to the hassle or cost, slowly saw business slide to those that did. Maybe your business has a new technology that you have been fighting. I'm not saying there is an issue with old school, but when the market is screaming for something else, you have to make sure you aren't making an emotional decision but rather a calculated one.   Insufficient Capital / Financial Resources Many small business owners are surviving job to job. Very similar to their counterparts with jobs living paycheck to paycheck. When you are taking every dime out of your company and not creating some cash reserves for emergencies or growth, you risk losing everything in a blink of an eye. You also stunt your businesses growth as you don't have the capital to grow. You can't invest in marketing, in people or in equipment. Another risk you have is, when the weather doesn't cooperate. If your business is landscaping and you have not saved up for those leans months, then you will not have the financial resources to survive.   Not Paying Taxes When you transition from an employee to a business owner, one of the most shocking things is to discover that you are not required to put money away for your taxes and you now get the privilege of paying your full 15% social security tax.  The problem is, when you have $1000 in your hand, the last thing you want to do is put half of it away for your taxes. So many don't.   **  For the full show notes click the link below!   HELPFUL LINKS Podcast Website: LocalSmallBusinessCoach.com Leave your Message on the website with the Speak Pipe Button or just email me at [email protected] Episode Show Notes:  Episode 21 - Local Small Business Coach Podcast Our Training Materials for Local Small Business Owners:  TrainingforLocalSmallBusinessOwners.com Starting a Local Small Business Website:  StartALocalSmallBusiness.com