Is it a time issue? Is it a lack of skill? Is it budgetary constraints? What would help small businesses make the biggest impact in the shortest amount of time if that hurdle didn't exist?
All of the above, and more.
Human beings tend to stick with what provides proven results. That means doing things the way they've always been done.
Small business owners, like everyone else, have "invisible scripts" that affect their decision making even if they're not aware of it. They probably have this script in the back of their minds that says, "Anything related to technology and online tools is going to be expensive."
In other words, it may not be a REAL budgetary, skill, or time constraint, but the perception that these factors prohibit online ventures. Plus, they don't really know where to start. They probably know that either they're going to have to learn (script: "I don't have time for that") or hire somebody on to manage it (script: "I can't afford to hire someone to manage an unproven tool"). Perception trumps reality every time.
Though new technology can save money and make tasks easier in the long run, and online ventures don't have to cost an arm and a leg, if the perception is that such things are going to be expensive with questionable ROI...
But it may also be more fundamental. Small business owners get a bright idea, or have a skill, and want to turn it into a business. They decide they need a website. Then, usually much to their distress, they discover that they will have to be in 2 businesses. One of them is the one they want to be in, and the other is something, that vaguely dawns on them, under the heading of internet marketing. They aren't sure where to turn. They don't know who to trust. They discover that if they don't get a grip on technology and marketing, they probably won't have a business.
Have you heard the expression, "surrounded by people and no one to talk to"? The whole 'technology and marketing' thing is so vast, with so much information, much of it conflicting, that they wind up frozen in place. They don't know where to turn, or what a reasonable first step might be.
We've spent years trying to crack the code on this. I think we learn a little more about it every day. When it comes to technology and marketing online I think small business owners need to first take a step backwards, back to the basics of marketing and planning. I'm a firm believer in setting goals first, then making a plan based on those goals, and then taking action.
Without knowing what they want to accomplish it's difficult to decide which tools to use. More web traffic? More sales? Make the phone ring? And it's hard to determine a budget for online marketing if you don't know why you're doing it.
That said, I think small business owners face one or all of the hurdles mentioned. Time, skill, money. As to what would help, once they've identified goals and challenges, it's easier to identify if they need to carve out time, learn new skills, or outsource everything. I don't think there is one size fits all solution, but if you've got one, I want to know!
Another reason Small Businesses are so important to our economy or “I have to join what!”
I hope as part of your Business Plan you remembered to include all of those costs associated with the various groups you need to belong to. These groups, organizations or associations are the ones where as you belong, but cannot readily see any benefit you can put your hands on other than the notoriety or because it looks good. These may include Chamber of Commerce, the various national professional groups associated with your particular product or service and local associations relative to your product or service. At this point I am not including charitable organizations or activities as you do get tax deductions for these.
These various groups and associations require yearly fees or dues and can add up which is why you should be including these in your projections as costs for doing business. You should try and break these up as much as possible so they all do not come due at the same time, like at the first of the year.
Now, I have said you cannot readily see any benefit and I know there are those already building their argument as to why I am incorrect in making this statement. Let me explain by saying belonging to these groups may very well be necessary for the ultimate success of your business. In essence, by belonging you elevate your business in the eyes of potential customers for various reasons. If as a particular service provider you belong to the national association(s) representing this service then potential customers may recognize your business as being “better” than those that do not belong. In some cases these associations or organizations may include a referral base they may tout as a resource for sending you more business. Most, if not all of these entities, will provide you with their logo to include on your web page and or advertising materials such as business cards or brochures and fliers to show you are a member. Unless you receive direct customer referrals it is difficult to gauge how much belonging to these organizations actually contributes to your client base or sales and this is why I say you cannot readily see any benefit.
There are some entities such as the Chamber of Commerce that do offer benefits up front such as free advertising in their publications, free Grand Opening ceremony, free newspaper ad announcing your business opening and listing in their on-line local businesses data base. In many cases the Chamber will, also, have a referral base for those who call in looking for a particular type of business and if yours fits the need your number or website will be given out. Many of these referrals or listing in their periodicals is done on a rotating basis and therefore your business may not always show up. These benefits are real and do offer something in exchange for the yearly dues. This is one of the better investments your business can make as many people view those belonging to the Chamber as true members of the community and the Chamber encourages the members to shop at or use the services of other members exclusively or whenever possible. This coupled with the many get togethers the Chamber sponsors will allow your business to make many contacts quickly. Some members of the Chamber will, also, offer discounts to other members.
Deciding on just which ones to belong depends on your particular business and should include your current income. You may want to focus on the ones with the most potential for return first and join others down the road as your income increases. Just don’t forget to allow for the dues on a yearly basis. Tracking your sales/client improvements should shed some light as to which organizations are providing for an actual return on investment and at some point you may want to invest in a survey to better identify where the most returns are coming from. This is no different than recognizing which type of advertising is providing the most bang for your buck and then changing your contributions accordingly.
Participation by small businesses in these organizations and associations provides a direct economic benefit in the creation of jobs and strengthens products produced in the United States as well as pride in your local businesses and locally produced products or services. So don’t just stand alone in your business, but contribute and join many others like yourself and enjoy the benefits of being part of a larger group and use this to promote your business to its fullest!
The Top 10 Mistakes People Make When Starting A Small Business
Here is our top 10 list of mistakes people make when starting a business:
1. Not enough money: The most common reason why new businesses shut down is that the owner runs out of money. Cash flow is critical to a startup business. You could be profitable and still have to close your doors because your customers are taking too long to pay you. Cash is king in a startup venture and you need to prepare for it.
2. Not thinking survival: Starting a business is all about survival. How do you stay around one more day so that you can learn more about your market and close new customers?
3. Losing momentum: Many new entrepreneurs have ambitions to start a business so they create a website, try to make a few sales, go all out for a few months and then stop completely. Building a business is all about momentum. If you had 24 hours to spend on a business they would be put to far better use by spending one hour a day than for 24 hours straight.
4. Doing it all alone: Nobody is perfect or has the skills to do everything themselves. You need to understand what it is that you bring to the table and what you need to surround yourself with. If, for example, you are very strong at inventing but don’t want to sell then you need to find a salesperson to help you.
5. Not hiring right away: You should begin looking at who can be brought on board to help you from the first day of starting your company. There will be tasks in any business that you, as the owner, should not be focusing on if you hope to build any sort of sizable organization. Why are you doing admin work when you should be out closing customers, talking to the media, and landing new partnerships?
6. Doing it just for the money: If you don’t truly love your business then you won’t be successful. If you read the stories of famous entrepreneurs and how they built their organizations you will find that it all comes down to the root of loving what you are doing.
7. Getting to year 1, past year 2: Many entrepreneurs have a hard time getting to the end of year one. Typically it’s because they started the business on a whim and got excited about an opportunity but didn’t do the proper research. These entrepreneurs usually run out of money and close down after a few months.
8. Don’t build around a customer: The best way to make a lot of money quickly is to find a customer who has a problem and is willing to pay you to solve it – and then you go out and build the solution. Most entrepreneurs take the opposite mentality of “if I build it, then will come” only to realize that they’ve built it and nobody is coming. Instead of talking to customers as to why they’re not coming they decided to continue building and building. Soon they find out that they’ve invested years of work and nobody is interested in buying from them.
9. Don’t seek mentors: A great way to get a business going is to find out what other people have done to achieve success and implement those strategies into your own company. Find mentors who have knowledge of your industry and will give you time out of their day to help you.
10. Don’t get involved in the community: Tied in with not seeking mentors is not getting involved in the small business community. Countless opportunities are generated by connecting with other young entrepreneurs and finding out what they are up to and how you can help. You will get new business opportunities, partners, investment, media attention, ideas for productive tools to use, advice for your company, and many other resources that otherwise would take you years of trial and error to figure out (if you ever do at all).
1. Not enough money: The most common reason why new businesses shut down is that the owner runs out of money. Cash flow is critical to a startup business. You could be profitable and still have to close your doors because your customers are taking too long to pay you. Cash is king in a startup venture and you need to prepare for it.
2. Not thinking survival: Starting a business is all about survival. How do you stay around one more day so that you can learn more about your market and close new customers?
3. Losing momentum: Many new entrepreneurs have ambitions to start a business so they create a website, try to make a few sales, go all out for a few months and then stop completely. Building a business is all about momentum. If you had 24 hours to spend on a business they would be put to far better use by spending one hour a day than for 24 hours straight.
4. Doing it all alone: Nobody is perfect or has the skills to do everything themselves. You need to understand what it is that you bring to the table and what you need to surround yourself with. If, for example, you are very strong at inventing but don’t want to sell then you need to find a salesperson to help you.
5. Not hiring right away: You should begin looking at who can be brought on board to help you from the first day of starting your company. There will be tasks in any business that you, as the owner, should not be focusing on if you hope to build any sort of sizable organization. Why are you doing admin work when you should be out closing customers, talking to the media, and landing new partnerships?
6. Doing it just for the money: If you don’t truly love your business then you won’t be successful. If you read the stories of famous entrepreneurs and how they built their organizations you will find that it all comes down to the root of loving what you are doing.
7. Getting to year 1, past year 2: Many entrepreneurs have a hard time getting to the end of year one. Typically it’s because they started the business on a whim and got excited about an opportunity but didn’t do the proper research. These entrepreneurs usually run out of money and close down after a few months.
8. Don’t build around a customer: The best way to make a lot of money quickly is to find a customer who has a problem and is willing to pay you to solve it – and then you go out and build the solution. Most entrepreneurs take the opposite mentality of “if I build it, then will come” only to realize that they’ve built it and nobody is coming. Instead of talking to customers as to why they’re not coming they decided to continue building and building. Soon they find out that they’ve invested years of work and nobody is interested in buying from them.
9. Don’t seek mentors: A great way to get a business going is to find out what other people have done to achieve success and implement those strategies into your own company. Find mentors who have knowledge of your industry and will give you time out of their day to help you.
10. Don’t get involved in the community: Tied in with not seeking mentors is not getting involved in the small business community. Countless opportunities are generated by connecting with other young entrepreneurs and finding out what they are up to and how you can help. You will get new business opportunities, partners, investment, media attention, ideas for productive tools to use, advice for your company, and many other resources that otherwise would take you years of trial and error to figure out (if you ever do at all).
Practical Advice For A Small Business Startup
Many new small business owners start on a vision which is great; however that vision truly does not have a plan. A business plan is important to offer a solid foundation for your business model and forethought of expense, income, marketing, etc.
I work with many small business owners and truly not all 'ideas' or 'dreams' are the right fit for that person. One major downfall with many business owners is that they act on impulse and not logistics.
Example... 'Bob' has a relative who is diabetic – he decides to open a store front bakery in a strip center and only utilizes family and friends to help create, build, market and originate ‘goods’. No one is on a payroll – everyone is a volunteer which of course equates to no accountability. The store receives some media attention due to the ‘specialization’ of the store. People come in from the media attention – store becomes busy – no true employees since employees are volunteers / family and Bob is now having a hard time keeping up on orders because he does not have the funds to purchase bakery supplies. Bob is selling as much as he can but he is truly upside down on funds since he has utilized all of his personal funds to get the bakery up and running. Bob realizes that he needs to sell over 5,000 cupcakes to make his rent, insurance payments, vendor payments, etc. Unfortunately, 7 months later, the bakery closes.
This is a true example of not having a solid business plan with a realized budget. Good people with good thoughts however did not have the guidance from a SCORE or SBA counselor to assist them with their business model.
Make sure that you take the time to meet with your proposed landlord to learn about the fine print, make sure you meet with the local village or city to learn more about the demographics of the area, make sure you have disposable income since you will not be ‘making money’ right away, make sure that you have a clear sense of what you wish to have your business look like – stick to your plans – do not let anyone up sell you on your plans.
Enumerating all the mistakes may be productive to a point, but discussing the means to avoid them as a whole is more constructive.
A sound business plan is the best tool for the new enterprise. It is just as much for the business planner as for the investor. Completing the process will convince the most important individual that a viable business vision exists for the enterprise. That individual is you.
When you have completed your business plan, you will be able to pitch it with confidence to people who can help you. It will be your road map to your future that you can slide across the table to a banker, partner or investor. You can address it with verve because you own it by having done it.
The free links below provide free tools and examples on business planning.
How To Write A Business Plan
Sample Business Plans
MicroMentor
I work with many small business owners and truly not all 'ideas' or 'dreams' are the right fit for that person. One major downfall with many business owners is that they act on impulse and not logistics.
Example... 'Bob' has a relative who is diabetic – he decides to open a store front bakery in a strip center and only utilizes family and friends to help create, build, market and originate ‘goods’. No one is on a payroll – everyone is a volunteer which of course equates to no accountability. The store receives some media attention due to the ‘specialization’ of the store. People come in from the media attention – store becomes busy – no true employees since employees are volunteers / family and Bob is now having a hard time keeping up on orders because he does not have the funds to purchase bakery supplies. Bob is selling as much as he can but he is truly upside down on funds since he has utilized all of his personal funds to get the bakery up and running. Bob realizes that he needs to sell over 5,000 cupcakes to make his rent, insurance payments, vendor payments, etc. Unfortunately, 7 months later, the bakery closes.
This is a true example of not having a solid business plan with a realized budget. Good people with good thoughts however did not have the guidance from a SCORE or SBA counselor to assist them with their business model.
Make sure that you take the time to meet with your proposed landlord to learn about the fine print, make sure you meet with the local village or city to learn more about the demographics of the area, make sure you have disposable income since you will not be ‘making money’ right away, make sure that you have a clear sense of what you wish to have your business look like – stick to your plans – do not let anyone up sell you on your plans.
Enumerating all the mistakes may be productive to a point, but discussing the means to avoid them as a whole is more constructive.
A sound business plan is the best tool for the new enterprise. It is just as much for the business planner as for the investor. Completing the process will convince the most important individual that a viable business vision exists for the enterprise. That individual is you.
When you have completed your business plan, you will be able to pitch it with confidence to people who can help you. It will be your road map to your future that you can slide across the table to a banker, partner or investor. You can address it with verve because you own it by having done it.
The free links below provide free tools and examples on business planning.
How To Write A Business Plan
Sample Business Plans
MicroMentor
Tips For Avoiding Failure As A Start-Up Small Business
Most small businesses fail within the first few years. That's just a cold hard fact. To avoid being one of them here's some tips to consider....
Many emerging entrepreneurs make the mistake of not being specific enough in choosing a target market. They think they'll be turning away potential customers if their services are not broad enough. This also means that their vision in marketing is too broad and clouded. Lacking a specialty can come off as a lack of commitment or lack of expertise in any given service offered. You don't want to be a jack of all trades, master of none.
Once "positioning" has been determined, I found that many people make the mistake of taking on every client and opportunity that comes their way. Instead, they should be focusing on clients that they will be happy working with, fit well with the expertise they can offer, and actually appreciate what is being offered. The mistake is that they end up dealing with clients that take up all their time and do not help them grow. The focus should be on serving clients that you really want.
Also, when branding and positioning their new business, instead of trying to compete head-on with others on price and/or services, they should try to build a niche in their market and in that way not compete directly with others. Try to be the best in one area instead of being good in a lot of areas.
I think it's irresponsible to tell new entrepreneurs to do what they love and they can make a business. No, not everyone can be an entrepreneur or business owner (which are two different things). A lot of people have skill and passion but lack the technical skills to run a business. Not everyone has access to incubator programs, MBA programs or consultants, so it keeps them from getting properly educated.
The other thing I would say is that people lack confidence and are risk averse. To be an entrepreneur you have to be willing to take risks and be confident in your product/service. Before anyone launches, they should be researching their market (and no, no just reading about it, but getting out there and talking to your demographic). Once you understand where the needs are, who the customer is, and how much they're willing to pay for your solution, then you can start building a company from there. It won't be perfect out the gate, but you'll have an idea of how to build your foundation. You can learn the rest of the skills along the way, or hire your weaknesses.
Too many people start businesses without a clear set of objectives that they can measure over time. This is like shooting a bow and arrow without a target. How do you know if you are successful if you have no target?
Many emerging entrepreneurs make the mistake of not being specific enough in choosing a target market. They think they'll be turning away potential customers if their services are not broad enough. This also means that their vision in marketing is too broad and clouded. Lacking a specialty can come off as a lack of commitment or lack of expertise in any given service offered. You don't want to be a jack of all trades, master of none.
Once "positioning" has been determined, I found that many people make the mistake of taking on every client and opportunity that comes their way. Instead, they should be focusing on clients that they will be happy working with, fit well with the expertise they can offer, and actually appreciate what is being offered. The mistake is that they end up dealing with clients that take up all their time and do not help them grow. The focus should be on serving clients that you really want.
Also, when branding and positioning their new business, instead of trying to compete head-on with others on price and/or services, they should try to build a niche in their market and in that way not compete directly with others. Try to be the best in one area instead of being good in a lot of areas.
I think it's irresponsible to tell new entrepreneurs to do what they love and they can make a business. No, not everyone can be an entrepreneur or business owner (which are two different things). A lot of people have skill and passion but lack the technical skills to run a business. Not everyone has access to incubator programs, MBA programs or consultants, so it keeps them from getting properly educated.
The other thing I would say is that people lack confidence and are risk averse. To be an entrepreneur you have to be willing to take risks and be confident in your product/service. Before anyone launches, they should be researching their market (and no, no just reading about it, but getting out there and talking to your demographic). Once you understand where the needs are, who the customer is, and how much they're willing to pay for your solution, then you can start building a company from there. It won't be perfect out the gate, but you'll have an idea of how to build your foundation. You can learn the rest of the skills along the way, or hire your weaknesses.
Too many people start businesses without a clear set of objectives that they can measure over time. This is like shooting a bow and arrow without a target. How do you know if you are successful if you have no target?
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