Small businesses play an important role in creating jobs, delivering innovation and helping to drive economic growth. Starting a business may be a major achievement but running it and surviving is an even bigger challenge. For every 10 businesses that are created, the life cycle of 6 businesses is less than 5 years. This can be for any number of reasons, some predictable, and by adapting their behaviour, business owners can increase their chances of success.
The four areas that have the potential to improve the success and survival of start-ups and micro businesses are as follows: Firstly, all small businesses should have a well written business plan to explain why people should buy their products or services, and then monitor progress to ensure that sales not on target are picked up quickly and corrective action taken.
The second area is use of IT. Most small businesses need to embrace the digital opportunities that the internet offers. The website is a window into the products and services they offer, but it should be a low-cost investment.
The third area is good cash flow management. Small businesses should be aware of late payers and build it into their financial planning as well as strengthening relationships with key customers.
Fourthly, SME owners need to adapt to the pressures of running their own business. The key is to accept these pressures as inevitable and to develop the mental agility to respond positively.