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Running a Small Business
Being self-employed (that is, being a sole proprietor or an owner of a small business) can be one of the more rewarding and wealth-producing ways to achieve a
profitable second income. In the past decade self employment has grown by 20.6%, and includes 16% of all workers in Canada. In British Columbia alone, nearly 98%
of non-public sector employees are employed in small businesses (being defined as businesses with less than 50 employees).
When you are a small business owner, you need to be a leader and manager in all areas of business -- from financial planning, inventory control, marketing, sales
and administration to supplier customer service. With so many hats to wear, there are bound to be mistakes made along the way. (In fact, nearly 1000 Canadian
businesses a year experience financial difficulties).
Up for the challenge?
Yet, you can be successful if you learn from others mistakes and have adequate plans and resources in place to have your small business running smoothly.
Here are some mistakes NOT to make:
- Lack of proper planning - often entrepreneurs do not adequately assess the type and level of resources they need on an ongoing basis. Goods-producing businesses often
have the lowest survival rate, likely due to the high upfront costs and other capital investments their owners have not estimated well.
- Lack of attention to detail in correspondence and administrative tasks: paperwork, or a lack of skill in dealing with it, can cause all areas of your business to
suffer.
- Inadequate Capital - An insufficient cash flow for items such as suppliers, employees, inventory, equipment, and unexpected expenses can affect daily functioning of your
business as well as your reputation.
- Poor Financial Records - Again, monitoring cash in and cash out means that you know where you stand at all times with your operation. Sales that came in from an
expensive promotional campaign means money well-spent if you analyze why it was successful; otherwise, the time spent planning your next campaign is time and money lost.
- Inadequate location - If your business is not convenient to get to, if they can't find parking, if it is in an area that is known to be "unsafe", and if there is
insufficient foot traffic by your store front, you will not only frustrate your current customers but will discourage potential ones. If you have a web-based
business, you need to ensure that your website is optimized for search engines so that searchers find you easily, and that you are linking and connecting with
your target groups through online forums, blogs, e-zine articles, and other media.
- Not meeting and beating the competition - Know what your customers want, find out what other competitors are offering, and make sure you anticipate and
enhance your product/service offerings in a way that keeps you uniquely positioned; otherwise, you might miss some important trends or lose your customer base.
- Not getting expert input - You can't know it all. With 2.3 million business establishments in Canada, there is bound to be someone you can connect with that can
provide you with some helpful information as you start and operate your business. Hire a consultant in an area where you need to build expertise quickly. Find a
mentor. Get a business coach. Neglecting to ensure you are on the right track can throw you off track in a hurry.
- Bad customer service - Underestimating the power of word of mouth can be devastating to your small business. As much as loyal customers will inevitably refer business
to you, they will take even more away if they don't feel that you have honored their concerns, needs and requirements.
- Poor Marketing - This is one of the biggest problems with small businesses - no one knows they exist! If you have little money to put towards print materials,
join a networking group or board of trade, think of a public relations "opportunity", or call the newspaper and see if they will write a profile about your business.
Try sending (with permission of course!) a broadcast email to your list of contacts. Get some customers in to generate some word of mouth while you build up your
revenues to pay for more elaborate promotional campaigns.
See other pages in our site for more about registering, buying (link), building (link)
and branding,your small business. See also our business opportunities.
Base for content source: Fern Reiss, Why Small Businesses Fail - http://thepublishinggame.com/art_whysmallbusinessesfail.htm
Statistics used in this article were sourced from: Industry Canada, Key Small Business Statistics, January, 2007 and Small Business BC.
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