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Why Small Businesses Fail and How We (Cross) Can Help You Prevent That

Whether you’ve just started, or failure is looming ahead, knowing why small businesses fail could help you make a breakthrough in yours.
The number one reason your small business is failing is this: You’re winging it.

This doesn’t mean that you’re not working hard or you’re not passionate enough. A “just wing it” mindset probably helped you at first. However, after the initial flurry of excitement, you now find your business unprofitable.

So, how does winging it cause small businesses to fail?

#1 – You Weren’t Fully Prepared

Not understanding concepts like contract law, how time-consuming admin is, and where you’ll get your funding, is a surefire way to ensure small business failure.

Following a spontaneous business strategy is unsustainable. You’ll soon be veering off brand, going over budget, and wasting time. Switch your mindset from doing first, to planning first.

You might also have started without a clear vision. Not having a “why” can be detrimental to how well your business performs. On the other hand, knowing that your small business is part of your bigger life purpose will carry you through the tough times. Cross CEO Jaco van Heerden emphasises that his relationship with God was pre-eminent in solidifying the vision for Cross Industries and choosing the right time to launch.

#2 – You Underestimate the True Scope of Branding and Marketing

Proper branding considers even the smallest design detail. It’s not just visual either, the way you communicate tells people what’s important to you and indicates the quality and trustworthiness of your business. That’s why you have to be visually consistent across all platforms, as well as in your communication style.

As for marketing, if you don’t understand your target market and whether it’s the right market at all, you’ll end up not reaching enough people or marketing to the wrong people.

#3 – You’re Neglecting Your Admin

You might be highly skilled and love what you do, but hate admin. Consequently, you’ve probably been battling with it, or completely avoiding it. Unfortunately, admin is part of the grind. Without an efficient admin system, you’ll lose track of your finances, fall behind on orders, and have a nasty surprise come tax season.

Consistent admin helps everything else run smoothly and lets you focus on aspects of your business that make you feel alive.

#4 – You Don’t Have a Tight Handle on Your Budget

If you’re not constantly tuning in with your budget, you risk making unnecessary money mistakes. You might start “borrowing” from one department to supplement another or overspending when stocking up on inventory, which can hinder you from completing vital transactions later on.

This is why planning your budget and being aware of the kind of capital you’ll need before you launch your small business is paramount. Ditch the fear of checking on your books so that you’re not overwhelmed by debts, taxes, and emergency costs when you least expect it.

#5 – You’re Trying to Make It on Your Own

Tackling all the responsibilities of running a small business on your own is admirable but can be overwhelming since you’ll inevitably run into tasks you don’t have the skills or personality for.

Thankfully, you don’t have to do small business alone. And although you may be wary of paying for professional help if your cash flow is tight, doing so will give you a return on your investment in time, while avoiding mistakes and allowing you to focus on your strengths.

In Conclusion

At Cross Industries, we understand the heart of entrepreneurs who want to make a lasting impact, but who lack knowledgeable support with the admin, legal, financial, and other aspects of running a small business. Our goal is to empower you with the skills you need to excel, as well as provide the experts you need for every aspect of your business. Let us help you analyse your why, plan your how, and assist you towards independence so that you can make your passion your profit.

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