4 Biggest Lessons Learned from Failed Small Businesses
It’s not always easy being a small business owner. You need drive, resources, experience in your field, and general business expertise to have a real shot at success. There are plenty of lessons learned from small business failures that can help you avoid the same pitfalls. You can better position your business for a more positive future with this valuable context.
Let’s look at four situations where small businesses can run into problems. We’ll then cover the valuable takeaways you can use to steer your company in the right direction.
Lesson No. 1: Document Your Plans and Strategy
One lesson learned from small business failures applies to everyone: Document your strategy.
Making a business plan is one of the most common suggestions for new companies. This plan helps you direct your attention and resources as you do the hard work of starting and building your enterprise. It’s also often required when applying for a small business loan.
You shouldn’t stop with that initial plan, however. Continuing to define your strategy helps keep goals, processes, and potential challenges clear as your company changes.
Inc. columnist Drew Hendricks highlighted the case of Evan White PR. This growing firm added its first stakeholders. Owner Evan White was so excited that he didn’t think to come up with a written agreement about the company’s future. The company was pulled in multiple directions without defined common goals. It had to take time to recover from its lack of a strong, unifying plan.
Ensure your business doesn’t run into the same problem by regularly updating your business plan. Make adjustments as your circumstances change.
Lesson No. 2: Seek Out Experts
Small business owners have passion that can take them far in their efforts. But it’s also vital to understand the technical details of operation. Very few entrepreneurs have the expertise to address everything in house.
Working with experts in these fields can help you avoid another lesson learned from small business failures: trying to do too much on your own. Forbes contributor Mike Kappel highlighted the value of advice from three types of professionals:
Accountants can provide valuable context about finances and the many decisions that come with them.
Lawyers can help you select the best business structure and identify potential legal risks.
Experienced small business owners can offer guidance on management, dealing with challenges, and much more.
Sometimes, good leadership means knowing when to take advice from the people you can trust.
Lesson No. 3: Missing Out on Marketing
You can offer a top-notch service or product and still run into issues if no one knows about your business. The specifics can change greatly from one small business to the next. But everyone needs to get the word out.
Investopedia said a failure to effectively budget for marketing can cause plenty of problems later on. That includes taking needed money from other business areas to fund outreach efforts.
Make sure you account for marketing costs and include a strategy that works for your business as part of your business plan.
Lesson No. 4: Not Funding Business Success
If you know you have a great opportunity for your business but can’t afford to act on it, you shouldn’t just move on. A responsible approach to small business loans can help secure the funding you need to grow and prosper. Remember that the bank isn’t your only option. Alternative lenders can offer more flexible terms and strong long-term relationships that fuel growth.
QuickBridge is here to help your company be the best it can be. We develop lending agreements that align with your business’s needs and goals, and we do it without the inflexible requirements put in place by banks. To learn more about how QuickBridge can help your business, get in touch with us today.
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