Top 4 Reasons Small businesses fail (Part 2)

So, people who do not have a business plan, and I’m gonna be quite honest with you, actually, the first business I had when I opened my Italian bakery, my wife and I, initially when we first started, I didn’t have a business plan.

But I did write one up and create one and sat down. We actually worked about two months on it and wrote a business plan after we had actually started our business, ’cause I realized that planning and overthinking and over this and over that doesn’t actually create anything. You will not have a business.

You will not create a online e-commerce business. You won’t create a food product. Nothing will happen if you just sit there and think about it and write it down on a piece of paper and just look at it. You have to take action on that. So, number 10, create a business plan. Give yourself at least a concept, an idea, a vision of where you wanna go, and just get started.

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Number nine. So, this day and age, the great thing about this next one, on number nine, is understanding the customers that you potentially want to have. You gotta understand who they are. Who is it you’re actually trying to get to come into your shop or maybe if you open a cafe or if you open a restaurant, a bistro, or even if you’re going online, if you’re gonna sell a food product.

Do a little research and just find out, if you’re making a granola mix, do you understand the people you’re trying to sell that to? Is it gonna be campers, hikers, people who are active and athletic? Those are the people you wanna search out, find out where they are online, and then you advertise your product to that.

But people don’t spend enough time actually trying to really think of their end users. Who is it gonna be using the product, the food product? Who’s gonna consume it? Who’s gonna eat it? If it’s just a candy or for some luxury chocolate or something to that effect, well, then find out who it is.

Who do you think’s gonna be buying it? So, a failure to actually kind of do a little bit of market research in regards to your demographics and who you think is gonna be buying it, that’s something that could really make your small business not succeed. And again, I’m not a big believer in spending 20 years researching things out.

Just spend a couple months even or a few weeks off and on, do some research, make some notes, find out who it is that you really wanna focus on, because it’s really gonna give you a huge direction. If you just randomly put something up online or you think you’re just gonna sit something in a grocery store and all of a sudden you’re gonna sell a million of pieces of it, a million units, that’s not gonna happen.

So, have some idea of who it is that’s gonna be consuming your food product. Okay, so next up, when it comes to, number eight, when it comes to being an entrepreneur, of course, you wear a lotta different hats, trust me. To this day, I still order supplies, I’m still answering emails for customers, I’m creating custom orders for people. I also handle all the shipping in our department.

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I do a lot, still do a lot, and we have a handful of people who help us out. But this one’s really, really important. When you begin to have inventory, if you’re bringing product into your warehouse, if that’s something you’re doing, if you’re reselling, or even if you’re making your own product and you have an inventory of the product but you’re not managing the product properly.

If you’re seeing some of your product selling, that’s really great, and you have a multitude of items, maybe you should steer away from those other items and focus on the thing that’s actually selling.

So, when you begin to mismanage the inventory you have, that poses a huge problem because you’re gonna end up tying up a lot of money in resources and time and all that into products sitting in your warehouse or wherever you’re making it, in your shop, and it’s going to cost you money, and you’re just gonna end up throwing it away because food products do expire.

They have a limited shelf. So, be aware of what you have on hand and make sure you manage it properly. Make sure you’re selling through it or pushing through it. If you’re producing a product that you’re selling then to a retail store, be aware of the timeframe that you’ve produced it because you have a window, an expiration window there, of your product. And if you’re overproducing a product and you’re not selling to retail stores, then you’re really kinda wasting your time and a lot of other resources.

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So, managing your inventory. If it’s not done right, it can cause your business a huge headache. Now, the next one up is a good and bad thing. Well, because I’ve actually experienced this myself when we first started. It’s really when your company grows fast, number seven.

If you’re company’s growing too quickly, if it’s expanding too fast, or if there’s a certain product that you’re selling a lot of but you don’t have the ability to maintain that growth, that can actually cause a big problem as well because when you begin to grow, obviously, everyone wants to grow a business.

But if you’re just relatively new at this and you don’t understand the expansion side of growing a business, having additional people on hand, having the additional payroll to cover that, maintaining the accounts that are ordering big vast numbers of your product, your business is not gonna do well because you’re not gonna be able to fulfill those needs for all of those customers, and that’s just gonna make you look bad.

So, not understanding and really handling the ability to have a company grow very quickly can cause a big problem. And I know it sounds kinda weird because you’re probably thinking, «Well, Damian, you want to make a lotta money.

«You want to obviously have your company grow.» Yes, you want your company to grow, don’t get me wrong. But if you don’t have the understanding of how to maintain that or have the staff on hand to do it, then growth is not gonna be a good thing for you. It’s gonna cause you a huge headache and it’s gonna make your company really not grow. It’s gonna go under.

So, making sure that you understand when you grow very fast, it can be a very good thing if you can handle it. If you don’t understand it and it’s gonna be overwhelming, then it’s gonna cause a huge problem.

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