Undercapitalization. Money's or the lack it may well be the leading cause of small-business failures. Far too many small-business owners underestimate how much money they're going to need, not merely to get the business up and running, but also to sustain it as it struggles to gain a commercial foothold.
Bad cash flow. This is the macabre cousin to inadequate capital. Even businesses that move past the embryonic stage often collapse when incoming cash doesn't at least offset expenses and other costs. Watch your "burn rate" (a buzzword coined by dot-com firms, which somehow reveled in how much available cash they were torching).
Inadequate Planning. Not surprisingly, this is the reason problems like capitalization and bad cash flow happen in the first place. It's critical that you map out as comprehensive a Business Plan as possible, covering financial issues, marketing, growth and an array of other elements. Granted, it can be time consuming, as a well-prepared plan can take weeks or months to complete. If you don't plan and still go ahead, you may end up with failure and thousands of dollars down the drain. Ingeniana can help you develop a plan to maximize your resources.
A Competitive Edge. Genuinely unique ideas or services are rare, but it's still critical that your business gain a toehold in some sort of singular niche that you can exploit. Be it a slightly different product or customer support that goes beyond your competitors; earmark that one element that sets your business apart.
Unfocused Marketing. It's essential to develop a marketing strategy not merely to identify who might buy from you, but why. Make certain your marketing strategy sets you apart so a customer can clearly see why they'd rather go to you than a competitor.
Inadequate Flexibility. From stacks of cash to battalions of seasoned employees, every small-business owner knows the advantages a larger competitor brings to the game. Well, one thing he can't necessarily do is turn on a dime, something small businesses can exploit. Never forget to remain flexible. If a product isn't quite right or a marketing campaign isn't really flying, don't be afraid to tinker. Making those sorts of in-course adjustments is much more unwieldy for the big guys.
Ignoring The Next Step. Make sure you and your people emphasize complete customer support, from doing things you don't have to to offering thoughtful, useful advice that goes beyond the ordinary.
You're Not An Expert In Everything. Don't try to be all things to your business. If you cringe at the thought of maintaining complete books, don't hesitate to hook up with a good bookkeeper. When a legal issue crops up, don't rely on your home-baked juris doctorate to evaluate the legal ramification. Establish a long-term relationship with an attorney; preferably one with small-business acumen.
Great Boss, Mediocre Staff.Make certain your employees are well-trained, fairly compensated and somehow share in the fire that burns in your belly.
Uncontrolled Growth. Ironic as it seems, but a small business that simply succeeds byond its anticipated dreams can fail just as quickly from the inability to manage rapid growth. The strain on the business, its cash flow and its personnel can spell big trouble in a very short time. Planning your growth path requires discipline and an understanding of the consequences of each act. An experienced outside Board of Directors or Advisors can help to overcome this and many of the other problems noted above.
