After conducting independent research with small business entrepreneurs who own businesses that are between 1 – 5 years old and generate revenue of $250,000 or less I was totally astonished by the results of this study and you may be as well.
The lessons we can learn from this study I think can really contribute to entrepreneurs future success IF we heed the warnings and make the necessary changes.
Thanks to the Millionaire Digest blog I was inspired to do my own research and post the results in a blog that would take 3 minutes or less to read.
MARKETING and ROI
Up to 70% of small businesses marketing budgets are spent with ZERO return on investment. Think about that for a minute… when you start out you often have very little money and you desperately need sales. Now compound the problem by spending money you don’t have and getting nothing in return from it. This is the challenge small business owners face everyday.
Reasons cited for this is a lack of knowledge about marketing, social media and how to engage their customers.
The lesson learned from this is that you need to find someone who understands how marketing works to help you ensure that what you are spending your money on actually generates sales.
DOING ALL THE WORK ALL THE TIME
90% of small business owners polled feel that they will never be able to bridge the gap and generate enough revenue to hire enough employees and remove themselves from day-to-day operations.
Reasons cited for this range from being fearful of letting go of control to viewing the extra workload of managing employees and doing the paperwork connected to payroll as being overwhelming.
The lesson learned from this is that if you have dreams of owning a business instead of just owning a job you need to educate yourself on how to create systems for your business, perhaps you also need to consider partnering with someone who can manage employees and at the least find a book-keeper to do the paperwork.
VISION AND FOCUS
62% of small business owners polled have lost sight of why they started their business, where they want to take the business in the future and have considered
quitting and returning to the workforce as an employee. 74% do not have or use a formal written business plan.
Reasons cited range from self-employment being to hard, not having enough money to fund the business, family and business responsibilities being overwhelming and no longer loving what they do.
The lesson learned from this is that before you start your own business you need to have a written business plan and you need to understand why you are taking this entrepreneurial leap. The “why” has to be greater than all other obstacles combined. The business plan does require sales projections, expense projections (a budget) and a cash flow statement but DOES NOT need to be complex or 100 pages long.