95% of small business fail for 5 simple reasons. Don’t make these mistakes!

When most people think about having their own business they’re imagining a world of shiny rainbows where money falls from the sky, evil bosses are dissolved in a puff of smoke, and freedom and happiness are the new way of life.

Store Owner Turning Closed Sign In Shop Doorway

However, the reality is that business is hard!

It usually involves big risks, big responsibilities, long hours, and an endless stream of problems and challenges that need to be solved by you.

Having your own business is like setting out on a hero’s quest. There will be monsters, villains to be conquered, and catastrophes to be overcome. In the end, however, if you fight a good fight, stay sharp and maintain focus, you can reach your paradise.

There’s another problem you’ll have to deal with though. Unlike the exciting adventure quest I’ve described above, running a business properly can be a bit mundane. It takes discipline and focus to do the things a good business manager must do.

Running a small business is a job and it needs to be treated as such. Most small business owners neglect this critical role because they’re comfortable being ‘doers’, performing operational duties. This is where mediocrity and potential failure begins.

If you’re happy with mediocrity, that’s fine but it won’t get you far. Unfortunately, we all experience dealing with mediocre small businesses every day. We see them come and go, one shuts and another one opens and you say to yourself ‘I wonder how long they’re going to last’. Do you really want to be just another one of those?

If you’re ambitious, passionate, or just plain proud of what your business does, then it’s time to harden-up and get focused on these 5 critical areas.

Most of us are familiar with the concept of either working ‘in the business’ or working ‘on the business’ but very few small business operators know how to go about working ‘on’ their business for maximum effect.

If you want true business success these are the 5 critical areas you need to master:

  1. Planning – who, how, what, why

Planning should be an ongoing activity. Your business plans and goals should be written down with clear action items that are completed, updated and reviewed on a regular basis. For maximum gain set short term actionable, measurable milestones of 90 days or less.

  1. Marketing – targeted, relevant, ROI

As part of your planning you should always have a current, well targeted, and relevant marketing plan in place with processes to track and measure the return on your marketing dollars.

  1. Processes – quality, consistency, reliability

This area is so under-rated. Whether you’re a one person show or not, you should have your processes formalised. It’s the way you do the things you do that creates your customers experience. By thinking about the best way to do things and turning them into simple systems you’ll create efficiency in your daily activities, and consistency in your customers’ experiences.

  1. Delegation & Training – quality, consistency, growth, lifestyle, scalability

Define and document the roles your business should have. There is massive power in this process, do it right and you are well on your way to business Nirvana. Even if it’s you doing every Role in the beginning, it helps clarify your thinking and prepares you properly for growth. Adding more people to your business without clear roles, processes and outcomes just adds to the chaos.

  1. Performance Management – cash flow, quality, team, growth, profitability

Understand the ‘metrics that matter’ (numbers). Watch your cash-flow closely and plan your growth carefully to ensure your cash-flow can keep up. One of the biggest killers of small businesses is rapid growth. If your business grows faster than your ability to maintain cash-flow you’ll end up in trouble. Master your Profit & Loss statement and Balance Sheet. If you don’t properly understand them, then learn how to. Business is all about money management and to be good at business you must be a master of money management.

While this may all sound overwhelming it’s actually really simple when you take the right approach.

The3rdgear has developed a unique system that has helped hundreds of small business successfully implement these processes over the last two decades, so there’s no excuse for not having a good business.

If it’s not happening for you under your own steam, then maybe it’s time to get some help from someone who knows how to accelerate you down the business success pathway.