Why are small businesses staying small?
In a recent analysis of Australian Bureau of Statistics data it has been revealed that there has been surprisingly strong growth in the number of small businesses in Australia. Interestingly, the data also highlights that along with an extremely high failure rate, the most notable outcome for small businesses, is that they stay small. It is widely accepted (and reported) that a great majority of small businesses will fail eventually. While it is necessary to be aware of these statistics, what is more important and should be given a greater level of attention, is what small businesses and small business owners do in the meantime to grow their business.
There are five key reasons that have been identified as to why businesses stay small. Business owners can focus on these key areas to work towards achieving success for their business.
1. A Lack of Vision for the Business – Business owners need to have a clear vision of where they want their business to go. Without vision, a business becomes directionless and loses focus of what its purpose and goals are. A business with no direction will find it hard to make any type of decision. Specifically, they are unable to take advantage of opportunities that arise to help the business grow, and similarly they cannot easily identify those that should be avoided. Often, a business that has no vision will expend a significant amount of time and money on trying different a range of options with the expectation that they will have an immediate and positive result.
2. No Passion or Commitment – Passion is usually aligned with a strong vision for the business. The dedication and commitment that comes from a passionate business owner will help in achieving the business’ goals. Whilst it is advised to set goals for the business, without commitment and passion, business owners can easily become distracted from these goals, and this in turn contributes to further slowing the growth of the business. Passion and dedication is infectious and a truly passionate owner can effect passion in their employees and customers.
3. No set goals or plans – A business needs more than just vision if it wants to achieve its desired position and level of success. Goals create stepping stones towards the future business position. These does not necessarily need to be a formal business plan – although this is highly recommended as it helps to plan and track the businesses progress – but it should at least be considered in detail to the point where it is clear in the mind of the business owner/s and easily communicated to staff and customers if and when required. Goals also assist businesses to not only find opportunities that may help them towards success but also creates the belief that success is achievable.
4. Business owners not valuing their time – It may seem obvious, but it is imperative that business owners spend dedicated time on the core functions of their business. They need to spend time working on the business not working in the business. Business owners often make the mistake of working on non-core tasks within the business to save on money or due to inadequate systems put in place to cope with these tasks. In order to be more successful, business owners should employ staff to cope with these non-core tasks and to help create adequate systems to then allow the owner to focus on building and strengthening the business.
5. A lack of business knowledge – Small business owners do not necessarily need to be an expert on everything but it is important for them to have the right kind of knowledge. Often having a basic understanding of the fundamentals of running a business will encourage them to seek advice and support in the areas of the business that they do not know as much about. An important area which is usually forgotten or is thought of as a costly expense by business owners is education. Education should instead be thought of as an investment, as a lack of education results in a lack of knowledge. Without knowledge and skills the business is inhibited from growing to it full potential.
The issue that most small businesses and small business owners have is that they find it difficult to achieve the reward and results that they expect in return for the effort in time and money that they have invested. It is important to remember that with the right vision and professional guidance and advice there is always the opportunity to re-invigorate and refocus your business, putting it back on track to the visions and goals that you have planned for.
If you feel that some, or all, the above reasons are preventing your business from maximizing its potential or expanding then the team at The Quinn Group can help you. From years of experience dealing with a range of small businesses the accountants and lawyers at The Quinn Group are able to provide advice to business owners to help them achieve maximum growth and profits through tried and tested business practices. For more advice on improving your business, contact us on 1300 QUINN or click here to submit an online enquiry.