Small-business owners don’t take vacation not because they don’t want to travel or relax or explore new adventures, [but] because they are scared to death their business will fall apart. Fortune recently reported half of small-business owners will take no vacation this year. Of the half that do go on vacation, 61% […] go for only a week, […] half of what the average U.S. employee takes each year. Also, when a small-business owner actually takes a vacation, 67% […] check in with work at least once a day, and only 15% completely disconnect from their business.
Gallup reported earlier this year that the total number of new business startups and business closures per year […] just crossed to the bad for the first time since this measurement began. Annually, 400,000 new businesses are being born nationwide, while 470,000 are dying each year. [U]ntil the recession began, startups outpaced business failures by 100,000 per year. If small businesses continue to die at this pace, disastrous consequences for our economy and way of life are right around the corner. […]
So why are businesses failing at such a high rate?
According to MSN, the No. 1 reason is running out of money too quickly. When starting a business, you need to plan as if you had no sales for six months and have that money sitting in the bank to cover all the startup issues. [B]efore the recession, business owners could borrow against the equity in their homes. [W]e don’t have that same home equity today, [which means many] new business startups are rolling the dice and not having as much in the bank. […] Larger businesses also face cash-flow issues—they may be completing their projects, but their clients are paying slower, so payrolls get missed and lights go off. […]
The No. 2 reason why businesses fail is overconfidence in their product that may be ill-timed or is a dud of an idea. [I]f you don’t test [the] market first or [if] you are not keeping up with the trends, there is a good chance customers won’t purchase your goods.
[T]he third reason is a poor pricing strategy. [The] competition may have a cheaper solution, [but] if you […] lower your price, there still needs to be enough margins to pay the bills.
How can we reverse this trend of more businesses dying than being born? One way is through a new program, “Big Ideas for Small Business,” that was launched last year by The National League of Cities in partnership with the City of Chicago’s Innovation Delivery Team. They have produced a toolkit that helps local leaders create ecosystems that support small-business growth with city resources and provides business owners with access to new sources of capital. Another resource is SCORE (Service Corps of Retired Executives), […] whose mission is to foster small-business communities through mentoring and education. […] The NFIB (National Federation of Independent Businesses) […] is a great resource for information and interaction with other small businesses. […]
This lopsided failure rate of small businesses is a concern to every community. For our cities to [only recent;y] realize this is a local issue that must be solved with “boots on the ground” reinforces that these entrepreneurs are not in this battle alone, [that] they have their “village” looking out for them. This is a good start to reverse our small-business death trend, [b]ut it also takes individuals in our communities spending in small businesses. These “buy local” campaigns truly make a difference; [f]or each $100 spent at local businesses, $45 of secondary local spending is done, compared to $14 for big chains. This multiplier effect trickles down and has a dramatic influence in keeping our local businesses alive.
America has been great since our independence, because, on the backs of small businesses, we have built an exceptional agricultural, industrial and intellectual powerhouse economy. We can’t afford to let these small businesses die, because just about every great economic accomplishment in our country started in the mind of an entrepreneur.
Original article here: https://www.huffingtonpost.com/marc-joseph/small-businesses-are-stil_b_5870328.html