When it comes to why small businesses fail, the list of reasons goes on and on. In fact, when you consider how basic and hard to avoid some of them are, you’ll start wondering how there are some businesses who actually make it even despite these odds. Fortunately, there are several general tips that you should take into consideration in order to overcome these challenges. Here are six of them that are universally applicable and quite easy to abide by.
1. Validate your ideas
The first thing you need to do is start formally validating all your business ideas. This means putting them down on paper and asking a trusted advisor to give their honest opinion of its validity. You also need to keep in mind that you might not be the best representative of your target demographic. In this particular scenario, the fact that you think that the idea is brilliant doesn’t mean nearly as much as you might have thought. Try to look at this from all angles and consider both the best- and worst-case scenario.
2. Flexible workforce
Another thing you need to keep in mind is the importance of managing a flexible workforce. In this day and age when you have the option of hiring remote employees and outsourcing to freelancers, there are more options for this than ever. You see, one of the things that run small businesses into the ground the fastest is the fact that they have huge overhead that their profit can’t make up for. Paychecks for full-time employees are a massive part of this overhead. With a flexible workforce, you can expand and decrease your staff at will.
3. Have a solution for cash-flow problems
The next thing you should take into consideration is the issue of cash-flow that comes from the abovementioned unexpectedly large overhead. Chances are that even though you’re profitable on paper, you can’t wait long enough for all your account receivables to arrive. In this scenario, you need a solution for your cash-flow problems. There are various ways to do so from selling invoices to looking for favorable unsecured business loans online. All in all, you need a way to provide your business with an immediate capital injection.
4. Pick scalable solutions
When choosing a solution for your business model, what you need to do is pick scalable solutions for your business. This will allow you to upgrade or downgrade your business model, without having to pivot every time when something goes afoot. The majority of digital tools allow for this option by offering several different versions of their services. The importance of the ability to change your mind at any given moment can’t be stressed enough. Cloud-based tools and platforms are particularly great in this field and scalability as a feature allows you one extra layer of safety net.
5. Gather the right team
People that you decide to work with will determine whether your business makes it through its first year or not. If you have people who want the same thing you do, you shouldn’t have much problem. We’re not talking about similar interests but similar values, which are much more important. Next, you need people who are willing to make that extra effort even if they’re not forced to do so. Finally, you need to look for expertise and niche-specific experience. The thing about this experience is that it comes over time, so even if your employees currently lack in this department, they can make up for it in time.
6. Delegate tasks
Lastly, you need to recognize the fact that you can’t do it all on your own and delegate some of these tasks onto someone else. Finding a partner is an ideal solution, seeing as how you get to share both financial and administrative obligations of running an enterprise. Hiring an assistant or a virtual assistant is also a great solution. At the end of the day, you need to trust your employees. Give them more autonomy, more responsibility and more say in running your business. This belief in their abilities and loyalty is going to pay off.
The reason why the above-listed six tips are so effective is the fact that they give you general pointers and not straightforward advice. In a volatile business world where context is everything and no two situations are alike, blindly following one’s advice would be outright reckless and counter-productive. Therefore, adopt an approach that can allow you to adjust and respond to whatever comes ahead. Sure, being proactive is better than being reactive but by increasing your reactivity, you might just have the next best thing.