Sometimes, even the most innovative small businesses experience their share of growing pains and financial hiccups. But if your venture is starting to fail, it's imperative that you take steps to address its underlying problems quickly. Only 50% of new businesses last for five years after inception, according to the Small Business Administration, and only one-third survive for 10 years, so if you'd rather be on the winning side of those statistics, you'll need to get ahead of whatever issues your company is facing. With that in mind, here are some of the reasons why your small business might be hurting -- and what you can do about them.
1. You're spreading your business too thin
In life, it's often better to be really good at one thing than be mediocre at many. Well, the same holds true for your business. Trying to do too many things could really set your company back, so rather than continue down that road, take a look at your product line or services and whittle things down. Narrowing your focus might enable you to successfully carve out a niche that customers respond well to, which could not only lead to an uptick in business, but also make running your venture far less cumbersome.
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2. You're not pricing your products or services strategically
Back when you established price points for your products or services, you no doubt did your share of research to land on the right numbers. But if it's been quite some time since you've taken a deep dive into those figures, it could explain why business is suffering. Because market conditions and consumer demand can change over time, you need to constantly reevaluate your price points to ensure that they're attractive and conducive to profits. So pay attention to the players who are entering the market (including online businesses that may be snatching your customers away), determine how they're pricing their products or services, and figure out how to stay competitive.
3. You're not outsourcing enough
It's nice to have faith in your employees and trust them to get the job done. But if your business is struggling, it could be because you aren't using the right people for the job. There are certain tasks it often pays to outsource so that you're not clogging up internal resources and wasting money doing things inefficiently. So take a look at your business and ask yourself if there are areas where your staff might be falling short. Then, go out and hire the folks who are better equipped to address those needs.
4. You're not updating your technology
We live in an age where technology changes so rapidly it's almost impossible to keep up. But while you don't necessarily need to sink money into all of the latest tools available to your business, it does pay to invest in newer technology that will make your operations more cost-effective and efficient. Failing to do so could put your business at a major disadvantage, especially when it comes to logistical matters like product manufacturing and delivery, so read up on the latest advancements and figure out which are worth your money.
5. You're not listening to your customers
Though customer satisfaction is crucial to the success of any company, when you run a small operation, it becomes all the more critical. And if you don't give your consumers what they want, they're going to take their business elsewhere. If your venture is failing, it could be because you simply aren't giving customers what they're looking for, so rather than remain in the dark, solicit feedback and work to address it. If you own a physical business, incentivize customers to fill out comment cards. If you're running an online shop, send follow-up emails requesting reviews or suggestions for improvement. Hearing how you're doing from customers' perspective can be an eye-opening experience, and it can also be the very thing that saves your business from folding.
Most small businesses don't go from thriving to struggling overnight, so be on the lookout for signs that things are starting to go south, and aim to get ahead of them. It's a far better bet than letting the company you've worked so hard to build go under completely.
