There are over 28 million small businesses in the United States – unfortunately, only 50% of these businesses will survive. This article looks at why some businesses fail to grow, while others are more successful.
Failure to Plan
One of the biggest reasons why businesses fail to grow comes down to a lack of short-term and long-term planning. While failing to plan day-to-day business tasks can have a negative effect on your productivity, efficiency and business growth, failing to plan for the long-term can be just as fatal.
Your business plan should include where your business will be in the next few days, as well as the next few months and years ahead. Include in your business plans important dates, deadlines and budgeting predictions.
Many businesses fail to grow because of inadequate leadership practices. The type of leadership style you implement in your business will trickle down to every aspect of your company, so it is important that you try your best to get it right.
This is true of your management style in all areas, including financial management and management of employees. Failing to take initiative, failing to solve problems quickly and failing to be proactive in your leadership style can greatly diminish the likelihood that your business will grow.
Inadequate leadership of employees can also drastically stunt business growth. If your employees don’t feel fulfilled within a strong and supportive working culture, you may find yourself with a high staff turnover and an inability to retain valuable employees.
Assessing Your Competition
Another reason why businesses may fail to grow is failing to research and understand your competition and the market as a whole. Successful business owners will conduct thorough research into their market to spot opportunities and make any necessary changes to their business model, and capitalise on any gaps in the industry.
Many businesses owners become complacent regarding this, and this is a key reason why many businesses will fail to expand. Keep on top by staying informed about current business trends in your market, and make sure you take advantage of opportunities as they appear.
A key way to encourage business growth is to ensure that you are regularly differentiating yourself from your competition. What is unique about your business model? What can you offer the consumer base that your competition cannot? By focusing on differentiating your company from the rest, you are more likely to attract more customers and facilitate growth.
Ignoring Customer Needs
Another fatal factor contributing to the stunting of business growth is failing to listen to customer needs and concerns. While it can be a daunting task, creating a formal compliments and complaints system can be an effective way to learn from customers and make productive changes to your business model along the way.
Give your customer base a voice by enabling them to convey their concerns with you, and make sure you have systems in place to address these concerns as soon as possible. By listening to your customers and making changes where appropriate, you are more likely to retain them in the long term and gain more customers in future.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.