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How To Avoid Failure With Your Small Business

While success in business is not easy, it is not impossible. But there is a difference between starting a business and building a successful business.

You start the success process at the very beginning – by looking at yourself and selecting an online business that is perfect for your personality and moral values.

Analysing yourself as an online entrepreneur involves verifying that you possess the bare minimum of essential success habits. It’s akin to organising your course before heading on out.

Similar to getting things started without waiting for anybody else’s orders and staying firm in the face of adversities long enough.

Like combining the persistence with sensible observation. Blind persistence with a wrong approach only makes things worse. You must observe realities and learn from your successes and mistakes.

5 main reasons why startups fail infographic

Entrepreneurial Small Business

Entrepreneurship should be most evident in small businesses rather than in the bureaucratic corporate behemoths. Unfortunately, most small businesses do not exhibit entrepreneurship. Instead, most are misadventures that are doomed to fail within the first few years of existence due to lack of planning for the long-term.

Some are attempts at copying other run-of-the-mill businesses. For instance, someone sets up a grocery store in a suburb. Others follow. Soon there are many stores selling much the same merchandise competing for the custom of the small population in the suburb.

Others are pet projects of their founders with no idea of how they are going to make money with their businesses. You are fascinated by a steel cupboard and assume that if you set up a steel cupboard manufacturing facility, your “fascinating” product will simply get sold.

There was this businessman in a small town with a few thousand population. He had shop premises in a prime area in the town. He set up a steel cupboard making unit in a new industrial estate that came up nearby. And stocked his products in his shop.

Even if every one of the town’s population had bought one cupboard each from him, he would have sold only one month’s production. As it was, most residents already had one or more cupboards. It was a product offered by established large manufacturers, offering far better quality.

The shop of this businessman soon got full of unsold cupboards and in a few months he closed down both the shop and manufacturing unit. I don’t know how he disposed off the accumulated stock. All I know is that he was not seen much longer in the town.

Starting a business is similar to building a home.  If you do it right, it will protect you against any kind of storm or danger of the outside world, and will last a long time. Essentially, it offers shelter and protection. This could be translated to the fact that you want your business to be able to withstand economical ups and downs (storms) and provide income to pay the bills (shelter and protection).

So the first qualification of an entrepreneur is the habit of looking around at the market.

  • What need is not being met adequately now?
  • How could this be met?
  • How can it be met in a fashion that will immediately draw the attention of prospective customers?

Once the entrepreneur has answered these questions, raising money is not usually a problem.

The best entrepreneurs have the habit of identifying niches. Niches are areas that are not presently crowded.

The first grocery store in a particular suburb is filling a niche. Residents can now do their shopping without travelling to other suburbs. So was the PC that broke all price barriers and sold at an impossibly low price.

Generating niche ideas is not enough by itself. The entrepreneur must also develop plans to convert the idea into a profitable business. And assemble everything to translate the plan into an operating business.

Then run the business attending to issues like publicity, delivery, after sales support, costs, profits, government regulations and so on.

That’s the essence of entrepreneurship – generating profitable ideas and then converting it into a superbly functioning business. To do these, you need imagination, you need alertness, you need energy, you need resources, you need people skills. You could also do with plenty of contacts and some luck.

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