Surprising stats from the SBA
Dr. Garnett Newcombe and Kay Woods are business experts and award winning CEOs who have joined forces to start the speaking platform CEO Real Talk through which they share a realistic foundation for long-term profitability as businesses continue to grow and diversify. These experts advise that there are several hidden nuances that can destroy businesses, pointing out that according to the U.S. Small Business Administration (SBA), only about 50 percent of new businesses last five years or more, and only 33 percent last 10 years or more.
The two tell AGBeat, “Many experts have addressed the reasons businesses fail that range from inadequate cash flow, to high overhead costs, bad management, expanding too quickly and poor credit. However, in our many years as seasoned entrepreneurs, we have identified five less obvious factors that can completely destroy a business, particularly in the early years, if gone unaddressed.”
In their words, the following are the most common hidden nuances that can destroy businesses:
1. Getting a Second Job
In the early years of starting a company, most business owners feel stretched financially. Many combat this by developing a contingent back-up plan to either work at night or on week-ends just in case their business fails. However, if you straddle the fence you are setting yourself up with the option to fail. The “hidden nuance” here, which could have destroyed both of our businesses, is that if you continue down the path of straddling the fence or concentrate on maintaining your back-up plan, it will keep you from making a full commitment to your businesses. When you decide that failure is not an option because the livelihood of your family depends on your business and you commit to it completely, you will have a greater chance at success. In tough times we recommend scaling back on the “big bold sell” and focusing on those “low hanging revenue generating services” that are in high demand and have the capability to generate immediate revenue.
2. Not Understanding Your Financials
Not understanding your financials or not knowing what’s coming in and what’s going out is another “hidden nuance” that puts your business at high risk for failure. Operating in the blind is not something most business owners want to admit to. It is often not until a company has to start closing down projects that they realize a change needs to be made. Know what you’re spending on what and where you can cut back. There needs to be systems and processes in place to control purchasing and inventory and when budgets are developed for projects, they need to be followed. It’s important that you not only generate financial reports but that you understand them. It is your responsibility to watch over business finances not the accountant, the bookkeeper or the division managers. Not knowing your financials will quickly position your business to fail.
3. Your Dream vs. Business Opportunity
“I want to help, I’ve always dreamed of owning my own business, I love what I do” are often sound bites that business owners share with the world. Unfortunately, the “I” mindset is a “hidden nuance” that will keep a business from succeeding. What we have learned over the years is that the foundation of a good business is a good business opportunity. The number one focus for any business owner should be to fulfill a need in the marketplace. It’s not about your dream or fulfilling your interest, but about whether there is a need for your product or service.
4. Not Being Prepared for Economic Downturns
As business owners we dare to dream about saving or building a cushion for a rainy day. However, we often have the mindset that we are barely getting by and the thought of saving is not an option. Because of this many businesses were forced to close their doors, or came very close to it, during the economic downturn from 2008-2011. Not being prepared for an economic downturn is a “hidden nuance” that can be devastating to say the least. We recommend staying abreast of your customers buying trends, identify those customers that may be entering the “slow pay” zone (70 to 90 day payments), restructure staff duties in an effort to increase productivity, and cut back on unnecessary spending.
5. No Follow-Up May Mean No Repeat Business
Sometimes businesses take their customers for granted. We’ve all done it! Once we obtain our customers’ business we don’t follow-up or ask, “How are we doing?” Moreover, we fail to ask, “Is there anything we can do better?” The no follow-up is a “hidden nuance” that leads to loosing repeat business. Lack of follow-up can appear in the form of a decrease in sales or customer complaints. By the time you reach that point, it is often too late. The lack of follow-up and not responding to complaints immediately, positions businesses to fail. Avoid the possibility of losing business by taking the time to recognize your customers, ask them for feedback and ask them how you can do better.
Businesses thrive and survive for many reasons that vary on a micro level, but diagnosing failures or the potential for failure can be much easier to spot. Dr. Newcombe and Woods offer the five preceding common reasons for businesses to fall short, and knowing these potholes may save your business from its own demise.
Why a well-crafted rejection email can save your brand, and your time
(BUSINESS NEWS) Job hunting is exhausting on both sides, and rejection sucks, but crafting a genuine, helpful rejection email can help ease the process for everyone.
Nobody likes to hear “no” for an answer when applying for jobs. But even fewer people like to be left in the dark, wondering what happened.
On the employer side, taking on a new hire is a time-consuming process. And like a box of chocolates, you never know what you’re going to get when you put out ads for a position. So once you find the right person for the role, it’s tempting to move along without further ado.
Benn Rosales, the CEO and co-founder of American Genius, offers an example of why that is a very bad call.
Imagine a hypothetical candidate for a job opening at Coca Cola – someone who’s particularly interested in the job, because they grew up as a big Coke fan. If they get no response to their application at all, despite being qualified and sending follow-up emails, their personal opinion of the brand is sure to sour.
“Do you know how much effort and dollars advertising and marketing spent to make [them] a fan over all of those years, and this is how it ends?” Rosales explains. This person has come away from their experience thinking “Bleep you, I’ll have tea.”
To avoid this issue, crafting a warm and helpful rejection email is the perfect place to start. If you need inspiration, the hiring consultants at Dover recently compiled a list of 36 top-quality rejection emails, taken from companies that know how to say “no” gracefully: Apple, Facebook, Google, NPR, and more.
Here’s a few takeaways from that list to keep in mind when constructing a rejection email of your own…
Include details about their resume to show they were duly considered. This shows candidates that their time, interests, and experience are all valued, particularly with candidates who came close to making the cut or have a lot of future promise.
Keep their information on file, and let them know this rejection only means “not right now.” That way, next time you need to make a hire, you will have a handy list of people to call who you know have an interest in working for you and relevant skills.
Provide some feedback, such as common reasons why applicants may not succeed in your particular application process.
And be nice! A lack of courtesy can ruin a person’s impression of your brand, whether they are a customer or not. Keep in mind, that impression can be blasted on social media as well. If your rejections are alienating, you’re sabotaging your business.
Any good business owner knows how much the details matter.
Incorporating an empathetic rejection process is an often-overlooked opportunity to humanize your business and build a positive relationship with your community, particularly when impersonal online applications have become the norm.
And if nothing else, this simple courtesy will prevent your inbox from filling up with circle-backs and follow-up emails once you’ve made your decision.
Are Gen Z more fickle in their shopping, or do brands just need to keep up?
(BUSINESS NEWS) As the world keep changing, brands and businesses have to change along with it. Some say Gen Z is fickle, but others say it is the nature of change.
We all know that if you stop adapting to the world around you, you’re going to be left behind. A recently published article decided to point out that the “fickle” Gen Z generation are liable to leave a poor digitally run site and never return. Now of course we’ve got some statistics here… They did do some kind of due diligence.
This generation, whose life has been online from almost day one, puts high stakes on their experiences online. It is how they interact with the world. It’s keyed into their self-worth and their livelihoods, for some. You want to sell online, get your shit together.
They have little to no tolerance for anything untoward. 80% of Gen Zers reported that they are willing to try new brands since the pandemic. Brand loyalty, based on in-person interaction, is almost a thing of the past. When brands are moved from around the world at the touch of your fingertips there’s nothing to stop you. If a company screws up an order, or doesn’t get back to you? Why should you stick with them? When it comes to these issues, 38% of Gen Zers say they only give a brand 1 second chance to fix things. Three-quarters of the surveyed responded saying that they’ll gladly find another retailer if the store is just out of stock.
This study goes even further though and discusses not just those interactions but also the platforms themselves. If a website isn’t easy to navigate, why should I use it? Why should I spend my time when I can flit to another and get exactly what I need instead of getting frustrated? There isn’t a single company in the world that shouldn’t take their webpage development seriously. It’s the new face of their company and brand. How they show that face is what will determine if they are a Rembrandt or a toddlers noodle art.
The new age of online shopping has been blasted into the atmosphere by the pandemic. Online shopping has boosted far and above expected numbers for obvious reasons. When the majority of your populace is told to stay home. What else are they going to do? Brands that have been around for decades have gone out of business because they didn’t change to an online format either. Keep moving forward.
Now as a side note here, as someone who falls only just outside the Gen Z zone the articles description of fickle is pompous. The stories I’ve heard of baby boomers getting waiters fired, or boycotting stores because of a certain shopkeeper are just as fickle and pointed. Nothing has changed in the people, just how they interact with the world. Trying to single out a single generation based on how the world has changed is a shallow view of the world.
Chasing Clubhouse success? How the audio chat room trend affects products
(BUSINESS NEWS) It is inevitable that when a new successful trend comes along, other companies will try to make lightning strike twice. Will the audio chat room catch on?
Businesses are always about the hot new thing. People are the always looking for the easiest dollar with the least amount of effort these days. It tends to lead to products that are shoddy and horribly maintained with the least amount of flexibility in pleasing their customers. However, you also have to look at the customer base for this as well. You follow where the money is because that’s where its being spent. It’s like a merry-go-round, constantly chasing the next thing. And the latest of these is the audio chat room.
During the pandemic the entire world saw an eruption of social audio investments. Silicon Valley has gone crazy with this new endeavor. On the 18th of April this year, Clubhouse said it closed on some new funding, which was valued at $4 billion for a live audio app. This thing is still in beta without a single penny of revenue!
The list of other companies who have pursued new audio suites (either through purchase or creation) include:
This whole new audio fad is still in its infancy. These social media and tech giants are all jumping headlong into it with who knows how much forethought. A number of them have their own issues to deal with, but they’ve put things aside to try and grab these audio chat room coattails that are running by. It’s a mix of feelings about the situation honestly. They are trying to survive and keep their customers.
If a competitor creates this new capability and they stay stagnant then they lose customers. If they do this however without dealing with their current issues then they could also lose people. It’s an interesting catch 22 for people out there. Which group do you fall in? Are you antsy for a new toy or are you waiting for one of these lovely sites to fix a problem? It’s another day in capitalism.
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