Spoiler alert, they may not be what you’re thinking.
Are you seeing any of these signs in your business? Are there any you disagree with? Leave a comment and tell us about it.
No time to watch the video? No prob, we got you.
-Shanna
Surprising Signs Your Small Business Is Headed for Disaster
Last summer I wrote an article for Business Insider on this topic and wanted to share an abbreviated version with you. (Read the full article here, if you’d like).
1. You are well funded with money that’s not your own.
Starting a business with someone else’s money seems like a dream come true, but it’s kind of like winning the lottery. If you didn’t earn it yourself, you will likely lose it.
Do you remember the name Samuel Langley? He was a well-educated, well-funded frontrunner in airplane development and Secretary of the Smithsonian Institution. Based on earlier successes in aerodynamics, the US War Department (now called the Department of Defense) gave him a grant of $50,000 (nearly $1.5 million by todays’s standards, when adjusted for inflation). On launch day in October of 1903, success was considered a given. But, much to the surprise of everyone involved, the aircraft quickly plummeted to the ground shortly after launch. Not long after that, the Wright brothers designed a better aircraft, in which they invested about $1,000 of their own money (about $25,000 today). As we all now know, they flew into the air in Kitty Hawk, NC and history was made.
What’s the take home message? Plan on bootstrapping your business and growing slowly. According to the SBA, most small businesses actually start with less than $5,000 in capital.
2. You think everyone is your target market. You know I’m looking at you! This is a mistake many small businesses make. In trying to keep their options open and casting their net wide, they end up blending in with the competition. Determine who your ideal customer is and why (profit margin, use of repeatable processes for efficiencies, etc.). Then, plot out the questions that the customer has at every stage in the sales process. Position your company as filling their exact, specific need for that exact, specific person. (It’s not enough to grow just for growth’s sake or you’ll end up spinning your wheels).
3. You work 18 hour days and never go on vacation. We all know that launching and growing a business takes a lot of time and effort, but constantly be on the look out for ways to work smarter. If you continuously put your business before family, both will suffer. Look for ways to create processes and systems out of the things that live only inside your head (and therefore require you), replace yourself where you can, and delegate often. Did you know entrepreneurs are more likely to experience mental health issues than other people? Read my Business Insider article on small business owners and mental health.
4. You don’t see your business model changing anytime soon. A successful small business always needs to evolve with what’s going on in the world around them. Invest in regular strategy-planning sessions with your key stakeholders and employees to intentionally survey what’s going on (in the industry and the market) and how you can best appeal to your ideal customer in it. Creating a habit of this will make your business more adaptable to future changes.