Owning a small business is an easy task and by following some steps and a small amount of investment, one can start a business but what after that. It is very important to measure the growth rate of your business whether it is growing at a constant pace or exponentially.
Most small business owners don’t think about their growth and are satisfied with what they have.
Small businesses contribute hugely to the country’s economy. Despite one’s best efforts to grow the business, some small business owners experience diminutive or slow growth. Here are some of the most common reasons for slow to no growth:
1. No Growth Goal– After meeting so many small business owners we have concluded that they sometimes or never thought of growing their business. Setting a goal and going harder to achieve is not what every small business owner can do. Several reasons are there why they don’t set a goal.
2. Inadequate Resources– Resources are the biggest key to success for any business. For any businesses to grow they should have proper access to resources. Small business owners don’t have that many resources to grow their business. These businesses don’t have proper funds to invest in different resources.
3. Improper Planning– Lack of proper planning is one of the reasons many small business owners fail to diligent. Many small business owner fails to take diligent but necessary steps of creating a strategic business plan that constitutes workforce need, Competitive analysis, sales and expenses projection and all other budgets.
An excited entrepreneur beguiled with an idea of opening a restaurant without proper planning and market research to see whether there is any gap in the food sector in that particular area. Try as much hard he can but he will not be able to create a customer base despite what he is delivering. To better ensure success, take whatever time it takes to create an effective business plan.
4. Poor Leadership and Management– Effective leadership and management are the essentials of a successful business. Lack of any can lead to confusion and conflict within ranks and reduce productivity. Prioritize to acquire the required skill where you think you are weak to strengthen the business. Read books on leadership from authors such as Warren Bennis, James C. Collins, John Wooden, etc.
5. Lack of Differentiation-Small Business owners sometimes fails to differentiate their products/services from others. Customers always try to find the difference you are creating through your products/services. Recognize your USP and try to sell the benefit the customer will get. No matter what you are selling you just need to make a difference through your product/services.
6. Optimal Pricing– Pricing has always been a concern in small business pricing is one the most important factor to attract your customers. Before you set your own pricing strategy find out who is offering the best value for money.
A great pricing strategy doesn’t mean lowering the existing price just to win more customers. Every market is divided into three classes- Lower, middle and upper classes. The first step is to identify which class you are targeting after you identify it will be much easier for you to set the price your customer love to pay.
7. Underestimating Competitor– Last but not the least is knowing your competitor. You need to understand your competitor’s business model, ponder the strategy they exert to maintain the top position. Know the strengths and weaknesses of your competitor both direct and indirect.
Also, you have to consider the disruptive start-ups who are delivering the same product/service at cheaper, faster, convenient, and better quality.