You were so keen on making more money; you started your own small business. You’ve been doing so well but it suddenly seems like out of nowhere your business is on the brink of collapsing and you’re wondering what could have possibly gone wrong.
The worst part of the situation is that you didn’t see it coming. In real sense, small businesses are the most vulnerable within the first three to five years of their existence. While most will hurriedly attribute their failure to the vulnerability of small businesses, some major problems could easily be avoided. Any of the following reasons could be responsible for putting your business on the edge.
- You lack business know-how; simply knowing how to do math does not automatically make you a business guru. Business needs business acumen. There are some decisions you would have made differently if your knowledge of the business was more advanced. While general business knowledge is great, having specific knowledge about the line of business you ventured into is even better. Imagine starting a poultry farm when you have no idea how long it takes an egg to hatch or which feed to give to which bird. That’s simply a recipe for disaster.
- Poor time management; if there’s one asset you have that can never be replaced, its time. This is why you have to make time management priority for your business. Your business is hanging on the balance now probably because of your tendencies to misplace priorities. Make the most of your time. It’s a valuable asset.
- You chose the wrong team; most small business owners make the mistake of employing staff out of charity (when they employ a family member, neighbor or friend just to help them out even when they are not qualified for the post) or out of micromanagement. people go out of their way to employ inexperienced staff simply to cut cost what they don’t know is that it will come back to bite them.
- You underestimated the competition; of course Nigerian Breweries will always be in competition with Guinness just as Indomie will always be in competition with Chikki Chikki but it will be very hard to hear of one running the other out of the market. This is not the case for small businesses though. When you fail to properly gauge the strengths of your competition they might drive you to close shop before you’re even aware of it.
- In-house conflicts; at this initial stage in your business, in-house conflicts could prove to be disastrous. Given that your staffs are but a few people, a small number out of the few will most likely hold important positions. a conflict might cause one of these people to quit leading to chaos and possibly shut-down of the business (even if temporary). Even bigger companies have dissolved due to such conflicts.
- Personal interference; you probably already figured out that this is your major problem. Dipping into the business proceeds for personal matters could be weighing your business down. It has never been good mixing business with pleasure (in this context – personal/private matters). Keep your private life separate from your business if you don’t want your business to suffer.
- Poor accounting records; the reason your business is about to collapse could be because you are keeping track of your money. Most business owners are only interested in the money coming in and not the one going out. Stay on top of your accounting records and be sure to closely monitor cash flow.
If your boat hasn’t fully tipped over yet, there might still be enough time for you to turn the tide. Get to work right now and adjust the way you’ve been running your business.