The Great Recession may allegedly be over for many businesses. However, the recovery for smaller businesses is taking much longer. Their recovery has been marred mainly by changing consumer habits, so even though consumers have started spending again, it’s what they are spending their money on that’s hurting companies.
There is little doubt that there have been some significant economic changes, which means some businesses may never recover entirely.
If you’re a business owner – whether you’re new to entrepreneurship or have been in business for some time – survival means doing things differently. There is a need to change with shoppers because the evidence is clear that their desires and needs have changed dramatically. This change or lack thereof is why businesses succeed or fail.
Does that mean the basics of business have changed as well? Is this why businesses succeed or fail? Simply put, business basics have not changed after the Great Recession. In fact, they’ve only been described as more important to have.
The same management traits that made people successful before the economic downturn are the same ones that ensure success today. What are these ever-important traits?
- Rudimentary business skills
The methods and techniques used will determine whether or business will succeed or fail. Keep with the same methods used before the downturn, and chances are your business will not be as successful as you would like it to be.
Many businesses have implemented strategies during the recession and afterward that have ensured their success. There have been some tactics that failed to boost a company’s bottom line, while others have managed to ensure its success.
7 Reasons Why Businesses Succeed or Fail
1. Create A Detailed Written Plan
A plan is necessary and should include financing, strategies, certain goals, marketing plan, sales plan and how cash will be used is crucial to a business’ success or failure. This plan doesn’t need to be a huge manual, but it does need to clarify what’s needed for success. Make sure to write it down, so it’s there in black and white for your review.
2. Be Amenable To Changes
You can have the best plan written down, but there may be instances that your plan will need to be altered for a particular situation. When that happens, just make some adjustments and keep moving forward.
3. Be Open To Advice
It’d be nice if people knew everything and were a jack of all trades. However, the reality is that people will know more than you and can help you through what you don’t understand. Listen to the advice they are giving you as they may give you advice that’ll boost the bottom line. These “advisors” are individuals you can go to for ideas, look over your strategies and hold you liable for what is happening in the business.
Listen with an open mind, even if the advice is not what you want to hear. You may feel personally attacked, but the key to remember is your business’ success. Listen to what they have to say and go from there!
4. Maintain A Record Of Anything and Everything
Have detailed written guides for everything that will help improve your business’ standing with customers/clients. For example, have a guide for customer/employee relations (customer service). You also want a guide about accounting. You want to know how to review the books every day so you can make smart money decisions.
Another crucial aspect of knowing why businesses succeed or fail is the cash flow pro forma or how much money your business needs to continue operating. It’s not about the money you have in hand, but what the business needs to stay in business. You should track your sales data at all times for this reason.
Finally, a disciplined follow through with up-to-date reports helps you make data-based decisions to ensure your growth. If your data is unorganized, you should consider using an email parser to extract the data from your emails to sheets, and into an organized spreadsheet report that you can easily understand.
5. Dole Out Responsibilities With Employees Without Being A Micromanager
The job of a manager is to divvy out responsibilities to the employees and review their work. You want to ensure they’re doing the work but not micromanage them to the point they feel nothing they do is acceptable. By not micromanaging your employees, you actually get results from them.
Begin by letting employees know what you expect from them, which you can do by providing them with an orientation meeting and a well-developed training guide. Develop an “incentive-based rewards system” to ensure your employees continue doing their best on the job. You also want to keep cool in stressful situations where an employee may have made a mistake. If you can keep in mind that mistakes happen, your employees won’t feel on edge when letting you know of the situation.
6. Social Networking
The Internet is a powerful medium that can reduce your marketing budget. However, social marketing takes time, understanding and skill. You want to foster a community of like-minded individuals through social mediums such as Facebook, Twitter, YouTube, Instagram, etc. The key is to establish a rapport with the target audience to stay ahead of the competition.
Social networking is one reason why businesses succeed or fail.
7. Change Up The Business
Success is the focus on net profit and not gross revenue. Your goal is to be competitive and staying in the past only hinders you from success.
It’s no easy feat being an entrepreneur, but it can be done. Knowing why businesses succeed or fail is one step toward your ultimate success. And, realizing that the Great Recession has altered the way people think and buy will help you to be successful long-term.