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No Detail Too Small: 4 Things That Can Make or Break Any Small Business
by Marlena Stoddard Wed, 10/05/2016 - 13:15
When you are running a small business, you need to make sure that you have all of the odds in your favor. Most small businesses fail within the first 3-5 years. This is why it is important to research what can doom a small business to fail. Learning about the things that can cause a small business to fail will help you avoid the pitfalls that many small business owners run into.
Clients Not Paying on Time
It can be very detrimental to a business when clients do not pay you on time. Sending a client a digital reminder to their email or smartphone is a very effective way to reach them. In the new digital age, many individuals take email as seriously as mail. However, it may become necessary to send clients with accounts that are severely overdue a stern notice to their mailbox. You can use a debt collection letter template or write the letter yourself, depending on the severity of the situation.
When accounting, you need to make sure that you are keeping very tight books. This can be very important not only during tax season, but when you are trying to get additional financing for your business. There are many accounting firms that you can hire if you would like to outsource your accounting. If you have the resources, it can be a great idea to hire an accountant in order to keep all of your accounting in-house.
Pricing is something that is very important to the success of your small business. You want to have pricing that is appropriate for your product or service. This means not pricing your product so inexpensively that you cannot turn a profit or only just break even on your overhead costs. This also means that you do not want to charge so much for your product or service you’re your customers cannot afford it, or are motivated to patronize your competition. The best way to find the right pricing is by researching the competition and applying this prices in the market. You can always tweak your pricing later down the line if you think it will get you better results.
Hiring the Wrong Employees
Employees are the backbone of your small business. You need to hire employees who are both dependable and trustworthy. You may even need an employee who can shoulder multiple responsibilities, and isn’t too proud to get into the nitty gritty of working for a small business. Many times you may not know about an employee's shortcomings until they have been a part of your team for a while. This is why it is as important to know when to let someone go as it is to know who to hire. Firing someone when they become detrimental to the company can be an important part of keeping your small business healthy.
Many of these items will probably not ruin a business on their own. However, small things can build up over time, or become compounded when combined with other problems. These four small things, if you stay on top of them, can not only keep your business afloat, but help it grow even more.