As a current or soon-to-be small business owner, you know – or will soon discover – that running a business is challenging and occasionally difficult. But if all goes well, it’s also rewarding both personally and professionally. Indeed, the only regret that successful small business owners typically have is that they didn’t take the leap sooner. Oh well, as the old saying goes: better late than never!
However, it’s also true that not all small business owners have reason to celebrate. In fact, about half of them won’t make it past the 5-year mark; and about a quarter won’t make it to their first birthday party. Naturally, there are different reasons for small business failure – including factors that are beyond a business owner’s control (e.g. recessions, changing laws and regulations, a Wal-Mart opening up across the street, and so on).
But surprisingly, there are things that small business owners do that sabotage their own triumph. Of course, these self-inflicted wounds aren’t deliberate. Yet the fact remains that they combine to block, impede and undermine success – and sooner or later, survival.
Here are the 3 fatal mistakes that small businesses make – and even more importantly, how to avoid them:
1. Failing to differentiate.
It goes without saying that competing on price is always important; even unicorns like Amazon and Google understand this principle. However, focusing solely on price is a race to the bottom. Small businesses need to ensure that in addition to offer value, that they establish brand differentiators – such as service, support, responsiveness, personal attention and so on – that attract profitable customers vs. bargain hunters.
2. Not hiring experienced sales professionals.
There’s a reason that good sales professionals are always in demand; especially during recessions. Unfortunately, many small business owners plan to hire legitimate, experienced sales professionals when they get bigger and have more working capital. In theory this makes sense, but in practice is usually doesn’t: because small businesses can’t and won’t grow without having trained sales professionals impressing customers and closing deals.
3. Not fully using the web.
While there are many reasons to love the web, it’s arguable that the biggest benefactors are small business owners. Indeed, in the pre-web days, small businesses had to spend enormous amounts of money to try and get on their target audience’s radar screen. But now, small businesses can get noticed online for a fraction of the cost. The key, however, is to fully use the web, which means having a functional and customer-centric website, and using online and inbound marketing to get and keep profitable prospects on the radar screen, and across the customer journey.
And before leaving this discussion, keep in mind that the web isn’t just for e-commerce businesses. Many professional services firms are using it to their advantage, such as doctors, architects and lawyers. For example, the Law Office of Charles Huber does a notable job of leveraging the web to engage prospective clients.
The Bottom Line
Running a small business is hard work and plenty of sacrifice, but the rewards can be significant – and in many cases, remarkable. Small business owners that wisely avoid the pitfalls noted above put themselves on track for sustained success: both personally and professionally.