Many small business owners confuse creating a product with building a business – and many fail because they don’t understand this difference.
These two things may sound like the same thing, but they are very different. Successful business owners understand the difference between the two, so I want to share how they compare to one another.
Many businesses start with a great idea. Maybe it’s an idea for a new product, a different way of delivering a service, or taking an existing idea and applying it to a new type of customer. Some ideas for products are services are brand new, such as a new invention or completely new service. For example, the iPhone was a new cell phone and music player created by Apple, which was a product that hadn’t been successfully created in the past.
Other ideas are not new, but still fill an unmet need in the market. For example, the Samsung Galaxy was not a new invention since it came after the Apple iPhone, but it still filled an unmet need in the market. Samsung attempted to create a product that was better and cheaper than Apple’s iPhone. Both the iPhone and Galaxy are successful products made by successful companies, but the originations of those two products are very different.
The key point here is that no matter whether your product or service is a brand new one or an extension of an existing idea, a business idea won’t succeed unless you build a “real” company to develop, market, and sell it to a mass audience. It doesn’t mean that your product or service has to be as popular as the iPhone to be successful – although I’m sure most of you wouldn’t complain if it were – but it means that you have to do more than just create a good product to make your business thrive.
There are a number of reasons why this is true. First of all, one product or service typically isn’t enough to make a successful business. It typically takes a number of complementary products and services to fulfill customer needs. For example, even the iPhone isn’t effective as a standalone product. It succeeds not only because it is a great product, but also because customers can also download music, subscribe to photo sharing services, and buy additional storage space from Apple. The combination of these products is what makes Apple and the iPhone successful. And the iPhone is just one of many products and services that Apple provides to its customers.
Secondly, the economy and customer tastes change very quickly, which means that no one single product or service is likely to stay popular for long. This means that if you want your small business to succeed in the long-term, you need to constantly update your products and services to constantly meet the needs of your customers. If you rely too much on one product, it won’t be long before it becomes obsolete and you find your business in trouble.
A good example of this is the company GoPro, which makes wearable recording devices for athletes and other active individuals. The product was initially very successful and enabled the company to grow to nearly $1 billion in revenue. However, it relied too much on this one product and has since struggled to maintain its growth in the face of competition from smart phones and other cheaper recording devices. As a result, the company is now facing a decrease in market share and revenue. At the time of this recording, the company was actively trying to expand its product offerings to diversify and meet the changing customer tastes, but it is to be seen whether this strategy will work.
The third main reason why building a company is so much more important than creating a product is because it is difficult to get each customer. For every dollar and minute of time you spend acquiring a new customer, you want to maximize the revenue you realize from that customer. Having only one product limits your ability to sell more to your existing customers that you worked so hard to get.
Finally, building a company enables you to have a sort of well-oiled machine that continuously creates more demand for your products or services, allows the business to create enough product to meet demand, and grow in the long-term. A product by itself won’t last for long if you can’t build a company that constantly creates more and more demand for it and finds ways to deliver those products or services profitably.
So, the summary is that building a company is more sustainable for long-term growth. It allows you to be more nimble and more quickly adapt to changing customer needs. It also allows you to build a business that can last beyond the original owner, in the case that you may want to sell the company or pass it on to your children. A company that provides a single product or service can’t provide this level of growth potential and sustainability.
This is one of many things you can learn from a free trial of our small business training courses. Click here to register for a free trial to learn how a proven small business program can help you start and grow a successful business.
You may recall in a previous blog that we discusses how a marketing and sales funnel is so important is because you don’t want to simply try selling to every person in the world. As great as your product or service may be, only a certain portion of people are going to be interested in it, so you don’t want to waste time, money, and resources trying to sell to people that will never become customers of yours.
The same is true for our marketing strategies: we don’t want to try marketing to everyone in the world. Instead, we want to define our target audience and focus our marketing strategies and efforts on them. This allows us to manage our limited cash and resources, and get more out of that limited cash and resources. It also ensures that the leads we draw into our marketing and sales funnel will be more likely to convert into paying customers. (more…)
Many entrepreneurs struggle with how to start a small business. However, growing a small business is even harder than the actual startup phase.
Often times, small business owners don’t know where to begin in growing their product or service offering, expanding their customer base, and reaching new markets. This can be overwhelming without the right framework.
Here are five things you can do to ensure your business scales quickly from initial startup to a sustainable business with long-term potential: (more…)
When you are first learning how to start a small business, it can be difficult to find new customers. However, you can begin to grow
your business by creating an effectiv marketing and sales funnel.
A marketing and sales funnel is the way that you capture leads, qualify them into “real” opportunities, and convert them into customers. You obviously won’t convert everyone into a customer, but your funnel is your way of moving people step by step through your marketing and sales process. (more…)
Apart from the gruelling task of managing employees by viewing them as individuals, entrepreneurs must adopt the most effective small business management styles. Appropriate management styles contribute to an organization’s growth and development. The right style promises to solve the problems in the organization, enhance employee satisfaction, and increase productivity.
But which is that management style that will ensure that these returns are guaranteed?
There are three primary management styles you have to choose from. Let’s talk about the pros and cons of each. (more…)
These dауѕ, аn online presence iѕ vitаl fоr any small business marketing effort, еvеn for briсk-аnd-mоrtаr ѕtоrеѕ thаt dоn’t соnduсt e-commerce. Studies hаvе shown thаt 97 реrсеnt оf соnѕumеrѕ search fоr local buѕinеѕѕеѕ оnlinе, whilе 94 percent of B2B buуеrѕ research companies оnlinе firѕt.
Even though effective websites are a common small business challenge for entrepreneurs, crеаting a wеbѕitе isn’t еѕресiаllу diffiсult with thе many wеbѕitе creation tооlѕ available. Whatever ѕоftwаrе уоu choose, kеер these dеѕign рrinсiрlеѕ in mind: (more…)
“Action without vision is only passing time, vision without action is merely day
dreaming, but vision with action can change the world.”
This is a famous quote from Nelson Mandela that really emphasizes how important it is for your business to have a clear vision that you can act upon. It also emphasizes how, if you do things the correct way, you can use your small business as a way to change the world. And hopefully this allows you to create wealth for you and your family along the way. (more…)
Hаving good search еnginе optimization iѕ a grеаt wау tо аttrасt people tо уоur business, goods, аnd ѕеrviсеѕ, and this should be a key component of your small business marketing strategy. If уоu wаnt реорlе tо learn аbоut уоur buѕinеѕѕ аnd idеаѕ, thеn having a gооd wеbѕitе iѕ an аbѕоlutе muѕt. With these tiрѕ you can hаvе рrimе ѕеаrсh еnginе орtimizаtiоn thаt will help your website gеt nоtiсеd.
Thе firѕt thing уоu need tо knоw is the imроrtаnсе оf your kеуwоrd. Kеуwоrdѕ аrе kеу. Onсе уоu сhооѕе a word thаt уоu аrе sure will gеnеrаtе a lоt оf hits, then уоu need tо place it ѕkillfullу thrоughоut уоur wеbѕitе in a way that will bе ѕurе tо аttrасt attention.
Thеrе аrе a variety оf things you can dо, tо inсrеаѕе уоur trаffiс flоw tо уоur wеbѕitе. Here аrе fivе tесhniԛuеѕ уоu саn uѕе: (more…)
Some of our recent blogs have addressed common challenges that entrepreneurs often face. Another common problem that we haven’t discussed yet is the fact that many small business owners confuse creating a product with building a business – and many fail because they don’t understand this difference. This is an important small business idea worth noting.
These two things may sound like the same thing, but they are very different. Successful business owners understand the difference between the two, so we want to share how they compare to one another. (more…)
One of the most common questions we receive from members and students of our small business training and mentoring programs is: how do I grow my small business outside my home country?
This is a good question and an important one of the best small business ideas, as there is a massive amount of opportunity for most products and services throughout the world. So, why limit your success and profits to inside your country?
Thе bаѕiс fundаmеntаlѕ involved in the еѕtаbliѕhmеnt аnd growing оf new businesses, аrе bаѕiсаllу thе ѕаmе intеrnаtiоnаllу with minоr рrосеdurаl diffеrеnсеѕ and cost rеԛuirеmеntѕ.
Here are five basic steps to establishing an international company: (more…)
If you fоllоw thе business news оr rеаd аrtiсlеѕ уоu would knоw that Aѕiа аnd especially Chinа iѕ еxресtеd tо bесоmе world’s lаrgеѕt есоnоmу bу 2020. India is following ѕuit and is еxресtеd to rank fоurth оn thе glоbаl economic scale by 2025. These can be attractive markets for your small business growth.
Aѕiа through its vast орроrtunitiеѕ and mаjоr wоrld population iѕ соnѕidеrеd tо bе thе key ѕtrаtеgiс growth market in vаriоuѕ fiеldѕ. It аlѕо hаѕ tо do mоrе tо thе flexibility оf the rеgiоn tоwаrdѕ growth аѕ thеу continuously move forward tоwаrdѕ dеvеlорmеnt аnd gаining influеnсе оvеr glоbаl markets. (more…)
Your small business growth and success depends on your business strategy. How well you have planned from creating to growing. Doing business requires a lot of hard work but it does not seem tiring because you love the work that comes along, but there comes a stage where your business is working fine but is not growing.
Do you want your business to grow but you are confused as from where to start?
You can avoid all those things by doing planning each and every phase of the business beforehand. Of course, you cannot plan everything, there can be some unforeseen situations that will demand a different managing strategy. By having a concrete plan for your business, situations like these will not derail your plans for growth and success. (more…)
There is no dеnуing the fасt thаt opening a business – no matter how big or ѕmаll – саn bе very сhаllеnging. Yоu hаvе to lооk аt ѕоmе factors to determine hоw well уоur business will реrfоrm. There is plenty of public information regarding American entpreneurs and small business ideas, but some tend to overlook the importance and appeal of some of Africa’s economies.
Wise реорlе dо rеѕеаrсh bеfоrе ѕtаrting a buѕinеѕѕ whiсh iѕ very important. Thеу lооk аt the dеmаnd of whаt thеу are offering and оftеn trу to ѕееk аrеаѕ with minimum соmреtitiоn or аrеаѕ thаt are easy to penetrate. (more…)
Mаrk Zuсkеrbеrg ѕhоwѕ trаnѕfоrmаtiоnаl leadership in асtiоn. Althоugh hе was fеаturеd аѕ a traitor in thе movie the Social Network, he fоundеd Facebook аnd turned it into a billiоn-dоllаr соmраnу, whiсh iѕ a ubiquitous company used by people all over the wоrld.
If уоu’rе thinking оf ѕtаrting уоur оwn ѕmаll business, thеn I can аѕѕurе уоu thаt уоu hаvе еvеrу chance оf bесоming ѕuссеѕѕful. Hоwеvеr, уоur сhаnсеѕ соuld be seriously jеораrdizеd bу mаking оnе оf thе mistakes mоѕt nеw ѕmаll buѕinеѕѕ оwnеrѕ’ make.
Dоn’t fоr оnе mоmеnt think thаt thе success of уоur buѕinеѕѕ dереndѕ on itѕ ѕizе. Rаthеr it iѕ уоur аbilitу to ѕuссеѕѕfullу сrеаtе аnd еxесutе strategies thаt will attract, keep and expand your сuѕtоmеr base thаt will ѕignifiсаntlу impact the ѕuссеѕѕ оf your business.
Diѕсоvеr thе usual miѕtаkеѕ mоѕt nеw buѕinеѕѕ owner’s mаkе аnd dеtеrminе nоt to rереаt аnу of thеm with уоur business. Here are the five most common small business lessons from these common mistakes: (more…)
Mаrk Cubаn is one of America’s most widely-known entrepreneurs. He hаѕ an аnѕwеr to thе world’s есоnоmiс ѕtimuluѕ рlаn. He also wants to hеlр by hеlрing реорlе tо think more entrepreneurial аnd оffеrѕ some small business ideas fоr ѕtаrtuр buѕinеѕѕеѕ.
He iѕ оn the right trасk. Thе ѕрirit оf thе еntrерrеnеur аnd thе рiоnееr is thе driving fоrсе behind whаt it is tо bе аn Amеriсаn. It iѕ part оf оur hеritаgе. Hiѕ plan iѕ worth lооking аt fоr those who hаvе аn idеа for a buѕinеѕѕ or аlrеаdу have a business and whо need invеѕtmеnt сарitаl tо fund it. (more…)
Small business ideas can be scarce at times, especially for bеginnеrѕ. Of соurѕе, it’s often times good tо ѕtаrt оff ѕоmеthing thаt iѕ not tоо grаnd. While mоѕt big соmраniеѕ today ѕtаrtеd as modest enterprises, it iѕ significant to note thаt nоt аll startups realize such great degrees of success.
With this in mind, it iѕ nоt bad to hеаr ѕоmе ѕtаrt uр аdviсе.
Find the Right Financial Resources
One thing thаt ѕеriоuѕlу dirесtѕ your ѕtаrting off iѕ hоw muсh resources уоu have. Even реорlе with nо background in economics and finances know thе importance of сарitаl whеn kiсking оff a соmmеrсiаl рrоjесt. However, not all entrepreneurs are fortunate enough to secure small business loans to finance their ventures. (more…)
Many people are full of small business ideas, yet they do not have the cash-flow to really begin it. Fresh out of the box, new organizations are regularly turned down for bank credit, and regardless of the possibility that your business is set up, assets can in any case be hard to secure. Advances supported by the Small Business Administration are generally more available; however they are turning out to be progressively aggressive.
With that in mind, there are several alternative sources of small business financing to choose from: (more…)
When it comes to small business ownership, there are many options to choose from. You can begin your own business without any preparation or you can browse a huge number of establishments and business openings, in essentially any field you need.
Truth be told, there are such a large number of various open doors and options accessible, that it’s occasionally hard to make sense of which is the best to pursue. When you decide you’d like help starting a small business, despite everything you have to comprehend the contrasts amongst the establishments and business openings, it is important to choose which is appropriate for you. Of all small business ideas, this may be one of the more difficult to decide. (more…)
Small business marketing is evolving quickly for small business owners, which implies that advertisers must be nimble in how they connect with potential buyers and communities.
As buyers navigate from Facebook to Twitter to Pinterest and Instagram, offers and deals are processed in an unexpected way. Eventually, the system that will be best for your versatile marketing endeavors depends to a great extent on your gathering of people, their interests and the kind of offers available to you. (more…)
Steve Jobs, the founder of Apple, is one of the most successful entrepreneurs the world has ever seen. He is also a good role model and source of small business ideas for young entrepreneurs who are thinking of building a startup.
Regardless of whether you are running a small business or a large one, the rules to small business success remain the same. Entrepreneurs can always follow Steve Job’s methodologies and ways to get success in their startups. Let’s have a look at those fundamental principles that made Steve Jobs successful: (more…)
TV can provide great entertainment. However, not everything we see on our television sets is broadcasted for entertainment purposes.
There are certain TV shows that are made to be informative and create awareness among people. You can see various shows promoting health activities or information oriented shows. One such show is “The Profit” that is telecasted on CNBC. The show is presented by Marcus Lemonis and it teaches the budding and entrepreneurs to upscale their business and widen the scope of profit.
Since it’s the start of a new year, following old ways of carrying business activities won’t make a difference if you do not try something new. Small businesses may find it hard to survive because of the other giants in the market.
In order to cope with the established businesses, entrepreneurs carrying out business on a small scale would want some tips that can really help them jumpstart their business. In this article, we have incorporated 5 simple tips to give your business a new boost in 2017 and increase revenues and profits: (more…)
Let’s face it – not every business owner today is proud of being financially stable. There are a lot of startups and small businesses whose expenses turn out to be far greater in their starting years, which calls for immediate action. That action, in this case, relates to obtaining finance from a particular source.
Now, small businesses usually refer to banks and similar institutions as their go-to financing source. As surprising as it may sound, there are a lot more sources to fund your business out there – and we are listing the best ones below. (more…)
Research shows that only 65% of emerging businesses make it to their 10-year mark while some of remaining ones even fail to survive for 5 years. The success and failure of any business depend on a great deal on its scale, size and the type. Small businesses usually find it hard to stand tall and often fall apart due to several common mistakes.
Growing too fast:
Business is a process that takes the time to generate the desired revenues. You cannot expect profits the very first month after you have started it. Patience is the key to successful small business. If you are eyeing immediate or fast growth of your small business or startup, you are doing it wrong. There are different phases of business in which you need to keep steady and patient. (more…)
As divisive as it may have been, the latest United States presidential election in the United States taught us a lot.
Not only do we know who the next president will be, but we now also have some great small business ideas and insights to glean from the campaigns. Regardless of your political affiliation, or whether or not you even liked either major candidate, there are plenty of takeaways from this memorable event.
Here are just a few lessons relevant to small business owners and entrepreneurs: (more…)
Starting, managing and growing a small business requires quite a bit of listening. Small business owners need to listen to customers, spot trends, solicit input from employees, and watch for regulatory and financial warning signs along the way to small business growth. Entrepreneurs without the ability to recognize these inputs and synthesize them into their strategic and day-do-day decision making often ultimately fail.
At the same time, there are times when it is important for small business owners to disregard inputs they hear from various sources. After all, there is a difference between detractors and non-believers versus those that are providing constructive feedback on how to make your small business more successful.
Here are three important scenarios where listening can be less helpful and more of a liability: (more…)
Chances are, you have a pretty good handle on the things that are most important to your small business and the industry you’re in. You’ve most likely identified a trend, problem, or opportunity and built a small business idea to address those needs in the market.
However, it is also important to keep an eye on bigger-picture small business trends that affect you as an entrepreneur and small business owner. In addition to the things affecting your small business and the industry you play in, there are a number of macro trends that every entrepreneur should be aware of.
Here are three current small business trends that are of particular important to small business owners in the process of taking their enterprises to the next level: (more…)
Incubators are an important trend in the startup world. Especially in technology hot spots such as San Francisco and New York, select small businesses take parts in these startup communities as a way to gain contacts, mentoring, infrastructure, and education to guide them on their journeys to small business growth.
While incubators can offer advantages to participating startups, they are not for everyone. In addition, although much media attention is given to startups permeating the startup community, they are not critical to the success of startups and small businesses. Just as is the case with any hot trend or topic with media buzz, it is important to understand the reality of incubators.
Here are a few important things to keep in mind when considering whether or not your startup or small business should pursue involvement with an incubator: (more…)
Starting, managing, and growing a successful small business is much easier said than done. If it were easy, more people would do it – and more people would be successful entrepreneurs and we would have more Steve Jobs, Mark Zuckerbergs, and Bill Gates in the world.
In reality, though, entrepreneurship and small business ownership is very difficult. Every day of owning a small business involves a number of curveballs, unpredictable variables, and other challenges that most business schools don’t teach. This career can be especially difficult for first-time entrepreneurs and small business owners. (For more, see our blog: The 5 Scariest Parts of Running a Small Business).
There is some good news, however. There are a number of resources that can provide the help, guidance, and assistance that may seem hard to find at times. In other words, you don’t have to be alone when it comes to navigating the waters of starting, managing, and growing a successful small business. And, you can learn from common mistakes of entrepreneurs – all without having to make those same mistakes on your own.
Below are three critical resources that can help you and your small business succeed, grow, and thrive without breaking the bank: (more…)
Earlier this week, we posted a blog outlining three reasons why small business growth is good for entrepreneurs and business owners. To summarize, the reasons are because you’re dying if you’re not growing, growth is the only way to create real wealth for yourself, and it’s the right thing to do (read the entire blog here).
While these are certainly valid points, small business growth is also a double-edged sword, with several risks and downsides. Starry-eyed entrepreneurs with grand visions of becoming the next big thing may not think about these challenges, but they are important to consider as you chart the course for your small business: (more…)
It is every entrepreneur’s dream to create a business that creates increasing success, money, and impact on society over time. In fact, most small business owners we work with have an innate and often times unspoken desire to succeed, grow, and enjoy the perks that come with that small business growth.
Beyond individual small business owners’ desire to enjoy success, though, we often times forget about the bigger picture benefits of small business growth. As it turns out, there are three distinct and compelling reasons why every entrepreneur should aim for sustained increases in their small business revenue and success: (more…)
It’s no secret that most businesses fail. By most measures, somewhere upward of 80% of small businesses and startups fail in their first few years of operation. What is less clear is why and how those small businesses fail.
Most small business failures are long in the making rather than overnight catastrophes. Experienced entrepreneurs will recognize the causes of and reasons for failure and take proactive and reactive actions to remediate those risks. Less experienced small business owners, on the other hand, won’t realize what hit them, even after the failure occurs.
There are several key early warning signs that, when properly remediated, can proactively provide a small business owner guidance on how to avoid small business failure and instead achieve small business growth. Here are three of the most common ones: (more…)
It is a well-known fact that hard work, dedication, and perseverance are all important to small business success. At the same time, however, few people ever explain the tangible and specific reasons why perseverance is so important to attaining your small business goals.
For example, in the classic book Think and Grow Rich, author Napoleon Hill examines how focus and desire can lead to business and professional riches. While the author does a good job of explaining the connection, here again, there is very little offered in the way of tangible ways that this focus and desire will help your small business succeed.
On the other hand, much has been written about other variables that commonly contribute to success. Popular business gurus and academics have analyzed all financing, education, leadership traits, and a spectrum of other small business success factors at length. However, none of these variables are nearly as critical as the more simple and universally accessible trait of perseverance.
Other than stating how important perseverance is, most business authors, gurus, and advice from the Small Business Administration gloss over this important topic. However, it is extremely important to understand exactly how perseverance will translate to small business success and help overcome the various obstacles that you face as an entrepreneur.
Below are the three ways that perseverance will help you on your way to small business growth and success: (more…)
It’s not often that a reality show can provide meaningful small business lessons for entrepreneurs and business owners. There is one exception to this rule.
In addition to the antics of Donald Trump and celebrities as diverse as Flavor Flav, Gilbert Gottfried, and Donald Trump, several years of the TV show Celebrity Apprentice have brought many lessons for small business owners and entrepreneurs. Even though the show is well-scripted and staged for a reality show, it still provides several takeaways that we can apply to our small businesses: (more…)
One of the primary challenges of entrepreneurship is the fact that small business owners need to possess so many skills and wear so many hats in order to realize sustained small business growth. On the one hand, they are required to be the visionaries for their new business or startup, while at the same time they are required to be a detail-oriented executor who can rally his or her organization to get things done effectively.
This is one of the key reasons why so few entrepreneurs are successful at the various stages of small business growth, beginning with the startup phase all the way through sustained growth and, if things go well, becoming a large organization. While entrepreneurs such as Bill Gates and Mark Zuckerberg provide case studies of those that can adjust and make the transitions through the various phases of growth, the reality is that most small business owners don’t have the personality types, skills sets, or interest in doing so.
Regardless of which phase your startup or small business may be in, there are a number of key roles that you need to fill as a small business owner. The skills and focus required for each of these roles are varied, which is just one reason why managing a small business can be so difficult.
According to the book The E-Myth Revisited by Michael Gerber, there are three key roles that small business owners must fill on a day-to-day basis: (more…)
Many successful small businesses begin with slow growth – sometimes painfully slow growth – before reaching a tipping point that propels them to steeper growth curves and success. But not every entrepreneur and small business owner understands the strategies and tactics required to reach the tipping point of small business growth.
There are a few strategies that successful small businesses use to reach the point of mass product acceptance and sustained growth. None of these approaches involve rocket science, but many entrepreneurs instead think they can simply rely on luck or time to make this happen.
Here are three ways that many small businesses are able to reach the tipping point of growth, scalability, and success: (more…)
Innovation. Creativity. Delegation. Empowerment. Flat organizational structures. These are just some of the management styles that most academics, journalists, and the Small Business Administration will tell you are “right” for small businesses, startups, and even large organizations.
These management styles all sound great. After all, who wouldn’t want to work at a place where there is unlimited creativity, bosses don’t get in the way, and you’re allowed to make every decision for yourself?
However, small business management isn’t quite that simple – especially if you plan to grow or scale your business with any success. In fact, these flavor-of-the-month management styles are often times the worst possible formula for certain situations.
Before we get into that discussion, though, it is helpful to first understand the two primary general management styles available to small business owners: (more…)
Most startups and small businesses begin with a grand vision or idea capable of propelling it to prosperity. As such, most entrepreneurs and small business owners are focused on the vision and strategy of the company rather than more mundane things such as small business software.
However, small business software can help your flourishing enterprise reach the level more effectively and more efficiently than if you were to gloss over this important aspect of small business ownership. Below are three areas in particular where small business software can help your business growth more quickly and profitably: (more…)
We all hear the common refrain regarding small business and startup finances: cash is king. As existing and aspiring entrepreneurs, we hear this so often simply because money can be so scarce during the early stages of a startup, as well as phases of high growth later in the startup’s lifecycle.
Just to add some tangible data to this discussion, I thought I would take a look at some preliminary results from our ongoing survey of small business owners. In the study, we are polling several hundred small businesses and startups to learn more about their risks, costs, profits, success factors, and a number of other variables. (Take the brief survey here and earn a chance to win a $250 American Express gift card).
Of the several dozen responses we have received so far, we found that each and every one of them – in other words, 100% of the businesses in the study – cited “managing cashflow” as a big concern and challenge for them. We suspect that this challenge may be at least partially amplified by the fact that credit is tighter for small businesses now than it was before the financial crisis of 2008. To add insult to injury, the US Small Business Administration (SBA) is cutting back on their government-backed loans in recent years as well.
So we wanted to hear what readers of our blog think: what sources of cash have you used to support your business, if any? Take the poll below and view the summary of results from other entrepreneurs.
In the meantime, we’ll dive into each of these sources of financing in more detail in a blog next week. Stay tuned. We’ll also cover this topic in our free online Small Business Boot Camp training course, so register or learn more here if you haven’t already.
It’s no secret that most small businesses fail within the first five years of their existence. Of those that do make it through those early years, most of them fail in the next five years after that. In other words, although entrepreneurship can result in tremendous rewards, it is by no means a cakewalk.
This brings up an interesting question: why do so many small businesses fail? Based on our experience running our own startups and looking at our research of small business success and failures, the answer is much simpler than most believe. It is simply because the owner of the company gives up.
Now, don’t get me wrong – most entrepreneurs don’t give up easily. However, they often times find that small business ownership requires a lot more work, patience, and financial commitments than they had thought, which leads them to revert back to their Plan B.
The most successful entrepreneurs, on the other hand, burn all the bridges behind them. They don’t look back. They don’t even consider that their business may fail. They don’t keep a Plan B in their hip pockets in case things don’t work out. In other words, they burn all the bridges behind them and fully commit to their startup’s success – and eventually translate that success into small business growth. (more…)
Entrepreneurs and small business owners are always looking for ways to increase their revenue. Whether your business is in the startup phase or if you’re an established business, this is probably something that you struggle with every day.
The good news is that you’re not alone. In our ongoing annual survey of small business owners, we found that a majority of entrepreneurs and small business owners struggle with how to identify sources of new revenue as part of their small business growth plans. In fact, in our preliminary analysis of the data we’ve received so far (we will be collecting data for the next several weeks, so you can take the survey here), concern about revenue growth is second only to concerns about cash flow.
With this in mind, we thought we would share some tips on how to quickly increase your revenue in the new year: (more…)
Uber’s rise to prominence may be one of the most sensational small business success stories in recent years. The company virtually came out of nowhere, disrupted a well-established industry, and racked up a $40 billion valuation in late 2014.
Despite Uber’s success – and the fact that many people will undoubtedly be using Uber’s car sharing service as the holiday festivities conclude with New Year’s Eve – the company has faced a number of challenges in recent weeks. Cities across the world, including New Delhi, San Francisco, Los Angeles, and Portland, have either sued the company or have forced the company to suspend operations for various reasons. Most recently, South Korea indicted Uber’s CEO for allegedly violating a public-transport law. (more…)
Last week there was a good article in the Wall Street Journal about Radio Shack’s struggles to avoid bankruptcy and remain solvent as a business. Although Radio Shack is by no means a small business, the trouble the company is facing is a good case study in some key points related to small businesses.
First of all, the company’s struggles are a good reminder of the various risks that businesses of all sizes face. Changing consumer preferences, new technologies, and financial headwinds are just a few of the many challenges and pitfalls that small businesses and their larger counterparts all have to navigate.
Second, this situation is a good reminder that bigger isn’t always better when it comes to small business growth. Radio Shack had become one of the biggest retailers in the world during its steep growth trajectory throughout the 1990s and early 2000s. However, the company’s growth has stalled in recent years and has instead been experiencing negative growth, fewer customers, and financial losses. (more…)
We’ve all heard the statistic that over 80% of small businesses fail in their first five years of existence. We’ve also heard the heroic success stories about entrepreneurs such as Mark Zuckerberg, Steve Jobs, Bill Gates, and others.
But we don’t hear much about how and why those entrepreneurs were so much more successful than the many failures that occur each year. Some might say it’s luck, but there are distinct differences between those that achieve consistent small business growth and those that fail.
Here are eight things that make entrepreneurs more successful than those that ultimately fail: (more…)
The holiday season is of course about giving and the holiday spirit. It’s a time of year when most are less concerned about themselves and more concerned about their families, the spirit of giving, and being thankful.
As we enter a new year, however, it is also a good time to reflect on the risks and rewards that we all experience as small business owners. Most entrepreneurs have a strong passion and belief in their businesses, but too few are reaping the rewards that they hope or expect to see. In fact, in our ongoing survey of small business owners, we find that most are not only concerned about having enough cash to sustain their businesses over time, but we also find that most are dissatisfied with the level of personal income they are making from their efforts.
This may not be surprising on the surface, but it is a bit concerning since most entrepreneurs start businesses to create wealth for themselves and their families. This is typically not the only reason for starting a new company, but it is an important one. Combine this desire with the level of risk that entrepreneurs face – whether it be risk of financial duress, legal issues, or the possibility of failure – and there is clearly a disconnect between what entrepreneurs should be earning and the pay they actually take home for themselves.
So what’s the right answer? Unfortunately, there is no single answer for all entrepreneurs since every small business is different, but here are four questions you should ask to determine the “right” amount to pay yourself: (more…)
Managing employees is a stressful part of managing a small business. In fact, our ongoing survey of small business owners reveals that hiring, firing, and managing employees is one of the hardest parts of managing your small business growth.
When you stop to think about it, though, it’s no surprise that employees can introduce a great deal of unpredictability and stress into a small business – especially those first few employees that are hired. After all, when an entrepreneur starts a business, he or she is typically the one that does it all. They perfect the way they want to see things done over time. Hiring employees, on the other hand, often means more inconsistency in how work is done, misaligned expectations and goals, and in some extreme cases, downright neglect and damage to the business as you are trying to manage small business growth.
With this backdrop in mind, it’s no wonder that so many entrepreneurs elect to remain on-man “solopreneur” shops without employees. While this may help alleviate some of the concerns outlined above, however, this approach is less likely to deliver long-term wealth and earnings when compared to companies that grow beyond their owner and founder. The good news is that there are other answers to help navigate these pitfalls.
Below are five things that will help you more effectively manage the various nuances of hiring and managing employees: (more…)
NBC’s TV show Shark Tank is one of the more popular shows about small businesses and startups. It’s nice to finally see this and other reality shows about businesses and entrepreneurs gaining mainstream acceptance.
Aside from providing great entertainment value, Shark Tank offers some good small business ideas for small business owners and aspiring entrepreneurs. Parts of the show may seem overly scripted or unrealistic at times, but it offers some good lessons for those about to embark on their entrepreneurial journeys.
A few weeks ago, we posted our top 10 list of the best songs to inspire entrepreneurs and small business owners. At the time, these were the best ones we could think of from a variety of genres and times – all which we thought would be best to inspire small business growth and motivation.
However, now that some time has passed since that first list, we realized we left quite a few off the list. Below are a few more songs that will undoubtedly inspire your entrepreneurial and small business endeavors: (more…)
We as entrepreneurs often think and talk about ways to achieve our small business growth goals through creative products and services, effective marketing tactics, and other creative endeavors. However, we often don’t spend enough time or effort determining how we’ll build our operations to scale for the growth that we expect to see.
Building your small business operations in a scalable way is a critical component of building a successful business – and a big risk for those that don’t address it. In fact, while many often assume that running out of cash is a key risk factor for entrepreneurial ventures, it is inefficient, inconsistent, and non-scalable operations that are more likely to cause you to burn through cash faster than you otherwise would. (more…)