Most of the blame for small business failures reported recently falls on over-regulation, labour laws and high retail rentals.
But are these the main reasons?
Look around your local community and see what kind of businesses have closed or are terminally ill. Too many restaurants (with high meal and drink prices). Clothing boutiques gone. Then there are businesses that have almost disappeared such as video shops and corner cafes (to the petrol stations).
Just out of this you can add another four small business killers – poor economic conditions, cheap imports, technology and businesses hungry to swallow smaller ones.
The experts from the big consulting firms say a lack of training of small business people is mostly to blame for failure. Training is important but business success depends on both internal and external factors.
What then are some things to watch for in the present disruptive business environment?
1 Intensity of competition. The higher the level of competition the thinner the margins are for small businesses
2 If you are in retail, find more cost-effective selling space. Rental costs can be your number one overhead unless you seek alternative options.
3 Carefully analyze the impact of technology on your business plan or your existing business. One stationery retailer in a shopping centre has closed down and has gone fully online.
4 Staff training. With so many consumers reporting bad experiences with businesses you can stand out if you have well trained, friendly staff. I recently hired a car for a short period and was amazed at how effective and friendly the staff were.
5 Be aware of the cargo cult phenomenon. People put in place systems and strategies that worked years ago but no longer have relevance. They wait like Islanders for planes to come in with cargo but no amount of magical thinking will make that happen. Instead, study current reality and adapt to the changing marketplace.
To own and run your own business takes grit. It’s hard and even harder in hostile, anti-business environments. Lonely too. You’ve got to have incredible believe in yourself. And an ability to spot con-artists in various guises – let’s not name them; wherever money accumulates, they’ll be swarming around.
Second acts are hard in life and just as hard in business. Times change. People change. Laws change. But the second-timers see gaps others don’t spot.
Entrepreneurs going out there now in this harsh, hostile and hazardous marketplace are not honey-eyed but smarter and more experienced.