Owning a small business may be a labor of love, but that labor is still, well, laborious. As a business owner, you face tremendous responsibility: To your business, your customers, your employees, your investors, and, yes, even to yourself.
Every day, you strive to serve those diverse interests, that plethora of needs, to the utmost of your ability. Nevertheless, no one is perfect, and even the savviest of entrepreneurs falls short sometimes.
However, some common mistakes can threaten the survival of a small business. Proactive owners, though, can take steps to avoid them before it’s too late.
We’ll discuss four strategies entrepreneurs can use to help protect their small businesses against the threat of failure.
1. Have a Strategy But Be Flexible
If you want your business to survive those critical first five years, then you’re going to need to strike the right balance between structure and flexibility.
Yes, having a detailed business plan and data-driven short-term and long-range goals is critical if you want your business to grow. Understanding your industry and your business’s place in it, both for the present and the future, is essential for defining and executing your business strategy. After all, without a business plan, you can’t truly understand the market, your customer, or the value your business brings to your customers’ lives and work.
At the same time, if your business plan is too rigid and too static, you risk being unable to keep up with the times. The market, after all, is constantly evolving, and if your business cannot evolve with it, you risk being saddled by an outmoded model or a product or service that has outlived its usefulness.
2. Always Do Your Homework
This tip aligns with our previous advice. If you’re going to evolve with the times, then you need to understand the exact nature of that evolution. That means harnessing the power of data analytics to monitor not only how the market is changing but also how the needs, expectations, and requirements of your target clientele may be shifting as well.
Without the most up-to-date information, you simply can’t make informed, strategic decisions about the future of your business. Likewise, you can’t respond appropriately, with evidence-based, data-driven solutions, when crises arise, as they inevitably will in business.
With the right data, however, you will be better equipped to support product development, optimize customer service, design effective, targeted marketing campaigns, and drive competitive positioning.
3. Always Prioritize Security
When you’re running a business, you have so many priorities competing for your attention that it can be difficult to give security the time and focus it deserves. You may think, for example, that your security work is done once you’ve established a secure server for your business and trained your employees in the most effective cybersecurity practices and protocols.
The reality, though, security is by no means a one-and-done proposition, nor is security simply about protecting your technology alone. Studies have shown, for instance, that workplace theft is on the rise, particularly in this era of economic uncertainty.
This means that, as a business leader, it is incumbent upon you to be vigilant and unceasing in your security efforts. This must include not only continuously updating cybersecurity systems and employee training, but also taking proactive steps to guard against the threat of employee theft, such as installing on-campus security cameras or using biometric technology whenever possible.
4. Create a Positive Organizational Culture
To be sure, the survival of any business is contingent upon the business’s ability to generate profits. However, small business owners can become so consumed by the bottom line that they fail to consider the kind of organizational culture that they’re creating.
Such a failure, unfortunately, can be devastating to employee morale, which in turn can wreak havoc on your business. Unless you are striving to cultivate, and maintain, a positive and productive work environment, you’re setting the stage for both high turnover and poor recruiting.
The good news, though, is that cultivating a positive work environment does not have to be difficult. The key is simply to ensure that your employees are a top priority–and that they feel this each time they come into work.
For example, you can demonstrate your support for your employees by offering flex time or a hybrid work schedule for those who are interested. You can also institute an employee recognition program to celebrate individual and team achievements. Similarly, you can offer discounted gym or spa memberships, as well as physical and mental health coverage, to underscore your commitment to your employees’ wellness and overall quality of life.
Too many small businesses fail within the first five years of operation due to largely avoidable mistakes. However, by balancing strategy and flexibility, unleashing the power of data analytics, prioritizing security, and creating a positive work environment, you can significantly increase the odds that your business will survive and thrive for years to come!