No one knows better than an entrepreneur or a small business owner just how many sleepless nights a person can tolerate before they suffer a meltdown. In the present economy, managing any type of business of any size is a challenge. Juggling so many responsibilities can drive even the most determined small business owner to question decisions and accidentally make huge errors in paperwork. Since you don’t operate on batteries, you will feel the stress much more intensely on some days. And on those days, you are more likely to make mistakes. To help you identify where your weak links might be, The Payroll Department is providing you with a list of 8 BIG reasons small businesses fail:
- The math just doesn’t add up: There’s not enough demand for the service or product at the price you’re trying to offer so your profits are negatively affected. A successful small businesses meets a need or fills a gap or specific niche.
- Owners who won’t get out of their own way in order to reach success: Sometimes entrepreneurs can’t see that they are in need of professional development and leadership Other times they do see but they refuse feedback for positive changes.
- Unexpected and overwhelming growth: Growing pains might seem entirely positive and creating jobs and a busy workplace can be thrilling. However, a small business that grows too quickly can be damaged quickly, especially in customer service. More employees on the payroll means more payroll taxes and greater revenues mean additional small business taxes.
- Poor accounting: If you aren’t keeping up with the numbers, you might as well go into work every day wearing a blindfold. Don’t assume either that an accounting firm, hired only to handle your small business taxes, will keep an overall eye on the company. That’s the responsibility of a chief financial officer – and in small business, that’s probably you.
- Lack of cash flow: Even if the recession is supposedly over, remember that business is cyclical. You can never entirely insulate your small business and avoid ups and downs and struggles. If your business is already out of cash and you don’t have much borrowing potential, you’d better pay attention to all the red flags.
- Poor management: Lack of focus, vision and strategy can kill a business quickly.
- Lack of a succession plan: Power struggles, personality clashes, nepotism, all of these are ingredients for the perfect disaster is a small business.
- A declining or changing market: As technology changes the face of everyday life, certain businesses are seeing the exit door. Avoid launching businesses that are in transition and may become obsolete. Work is changing, too. Employees are not spending all their time in the workplace. They work from home and on the road more these days. Keep your eye to the future.
There are a lot of chainsaws for entrepreneurs to juggle, especially those who are employers, too. The market and workplace are constantly changing. Payroll is one of a few constants. Tied with payroll taxes, remitting and reporting are required and are not going to go away. Find a payroll provider, like The Payroll Department, that can keep your payroll in order and your payroll taxes and compliance reports completed accurately and on time. Remove one of the chainsaws, call Teresa Ray at The Payroll Department.
-Sherri of The Payroll Department Blog Team