This picture is exactly what have been covering in my Small Business Management class. We have had several case studies where small businesses fail because the owner tries to spread himself to thin, doesn't do an adequate amount of market research, or simply doesn't have a plan. Starting a successful small business is by no means easy. I think the best advice I've learned is try to work in the industry for awhile, study your market, and then have a plan which you actually stick to. This will help maximize your success. For anyone interested in more small business management tips, theres a great book out there called "Small Business for Big Thinkers" by Cynthia Kay. Its a pretty easy read with a lot of insight.
I worked for two summers for a small business restaurant that ended up closing in its fifth year of operation and I think the article does of great job of discussing the key problems we faced. On our busiest nights we often struggle to prepare food quickly and this led to growing customer complaints and a drop in customer attendance. We did a poor job of preparing our product in a way that would keep customers happy and this is a huge problem to face on the busiest nights. The restaurant also tried to adjust its menu in the fourth year to move into a more luxury restaurant niche that was already very saturated in the town. They failed to study the demographic and understand that our previous customer base was not looking for a high-class restaurant and by switching markets we would only lose customers.
I agree with Clay. There are numerous examples of small businesses that fail due to the research or lack thereof in regards to the market. There are also cases where people do research the market, but they overlook specific areas of the market and don't analyze the research. Analysis of the research is even more important than just finding the information. Small businesses seem to fail more often nowadays since the the transition of big box stores taking a large portion of the market. In addition to competing with big box stores, mom and pop stores must compete with internet businesses such as Amazon that have cost-efficient models. It is too difficult to independently open up a business because of the work needed. Owners spread themselves too thin in regards to management, marketing and operations. It is advisable to hire somebody else to help you at the beginning, but they cannot afford to do this.
This picture is exactly what have been covering in my Small Business Management class. We have had several case studies where small businesses fail because the owner tries to spread himself to thin, doesn't do an adequate amount of market research, or simply doesn't have a plan. Starting a successful small business is by no means easy. I think the best advice I've learned is try to work in the industry for awhile, study your market, and then have a plan which you actually stick to. This will help maximize your success. For anyone interested in more small business management tips, theres a great book out there called "Small Business for Big Thinkers" by Cynthia Kay. Its a pretty easy read with a lot of insight.
ReplyDeleteI worked for two summers for a small business restaurant that ended up closing in its fifth year of operation and I think the article does of great job of discussing the key problems we faced. On our busiest nights we often struggle to prepare food quickly and this led to growing customer complaints and a drop in customer attendance. We did a poor job of preparing our product in a way that would keep customers happy and this is a huge problem to face on the busiest nights. The restaurant also tried to adjust its menu in the fourth year to move into a more luxury restaurant niche that was already very saturated in the town. They failed to study the demographic and understand that our previous customer base was not looking for a high-class restaurant and by switching markets we would only lose customers.
ReplyDeleteI agree with Clay. There are numerous examples of small businesses that fail due to the research or lack thereof in regards to the market. There are also cases where people do research the market, but they overlook specific areas of the market and don't analyze the research. Analysis of the research is even more important than just finding the information. Small businesses seem to fail more often nowadays since the the transition of big box stores taking a large portion of the market. In addition to competing with big box stores, mom and pop stores must compete with internet businesses such as Amazon that have cost-efficient models. It is too difficult to independently open up a business because of the work needed. Owners spread themselves too thin in regards to management, marketing and operations. It is advisable to hire somebody else to help you at the beginning, but they cannot afford to do this.
ReplyDelete