Small Business Killers – Protect Your Company

There are many ways a business dies.
The specific causes of each business’s death may differ.
However, generally they fall into five main categories: lack of cash; lack of a plan; disloyal, devious employees; dissatisfied customer with big voices; poor promotional effort.
Let’s take them one at a time and delve deeper.
Cash flow: Four out of five smaller businesses fail for lack of cash. More specifically, owners/managers fail to properly control costs; parcel out funds; keep the company going when events impact cash receivables. It is important to manage cash so the company can continue to survive. As one expert said: “In a crunch, pay only the bills that will close you down.”
At all times, negotiate longer payment terms with suppliers while attempting to improve collection of accounts receivable. This requires a balancing act but is often the key to survival and eventual growth.
Have a plan: This is an often neglected source of business success and failure. Without a plan, no business can survive. A plan offers a roadmap for management and employees. It begins with a clear definition of what the business is; how it will conduct its affairs; what are its goals; how will they be accomplished; and most important, what is the exit strategy.
Many small businesses start with an idea. But ideas are born every minute. How these ideas translate into actions leading to success. Every small business needs a plan to measure their progress. It is also important to review each plan on a regular basis recognizing no plan survives contact with reality.
Disloyal, devious employees: While seldom mentioned, bad employees can bring a small business to its knees. We know of an instance where a long-time employee was siphoning off sales into her own competing firm.
Businesses are vulnerable to long-term, trusted employees and those that appear to be living beyond their salaries. It is important to keep a careful watch on these employees.
Dissatisfied customers: Social media has made companies at the mercy of disgruntled customers. Bad reviews, if not dealt with can destroy a company. Unfortunately, many small businesses are also not dealing well with social media both as a reputation killer and a marketing venue.
Promotional acumen: A recent study indicates small business failures due to lack of social media acumen is on the increase. 2014 promises to be the year social media marketing will become the marketing mainstay of even the smallest business.
Without becoming adept in the social media arena such as utilizing geo-marketing to promote the company, many small businesses may be in danger.
Facing a new year fraught with many uncertainties, it is important to review if your small business is vulnerable to one or more of these business killers.