What Super Bowl 2014 Teaches Small Business Owners
Peyton Manning and the Denver Broncos showed us on Super Bowl Sunday that sometimes being ready mentally or physically doesn’t fully prepare you for what’s to come. A strong defensive line, a couple of failed throws, a picked-up fumble and an interception led the Seattle Seahawks to a 43-8 victory against the Broncos.
According to Yahoo! Small Business, to avoid failure, small businesses should be careful of these missteps in the first year of business:
- Ineffective marketing
- Failure to change with the times
- Unexpected growth
- Underestimating the competition
- Inadequate business plan
Peyton Manning, quarterback for the Denver Broncos, states, “It’s a difficult pill to swallow but you have to find a way to deal with it and process it. Fuel it to make you better for next year. The guys put a lot it into the season, put a lot into it these past two weeks to lay it all out there. So when you come up short like this, it is disappointing. It’s not embarrassing and I would never use that word. There was a lot of effort out there.”
Just as Manning and the Broncos will learn from this game, a small-to medium-sized business can turn failure into success. How? You look at what did not work and fix it. Let’s take the reasons above why businesses fail and discuss what you can do.
Ineffective marketing and failure to change with the times
“My restaurant failed because I solely relied on word-of-mouth for my marketing plan,” states Walter
Adrian of Los Angeles.”
Word-of-mouth has changed from the traditional style of passing information from person-to-person through oral communication to digital word-of-mouth. The latter is the act of grabbing your smartphone and opening an app like Yelp, Google Maps or Around Me to read reviews from perfect strangers on a particular location you are researching.
Word-of-mouth is no longer “let me call a friend and tell them about a great place.” Word-of-mouth is relying on a stranger to tell you their thoughts and opinions on restaurants, retail stores, gas stations, etc. As a result, the way your business is presented on social media outlets is in the hands of your patrons. By creating an approach to reply to good and bad reviews, you understand what your business is doing well or not so well. If you have ever completed a SWOT (strengths, weaknesses, opportunities and threats) analysis, you are one step closer to completing a solid marketing plan.
Unexpected growth
According to Yahoo! Small Business, unexpected growth can hurt a company fast. While it’s great to grow quickly, not being prepared can lead to careless decisions and temporary relaxation of the disciplines that made a business successful in the first place. Business Inc. says unexpected growth affects two areas: finances and management.
Businesses that fail from unexpected growth mostly suffer from cash-flow problems. Businesses will have great revenue and high margins but available capital may not be sufficient because of the lag time between sales and cash collections. NY Times editor Jay Goltz states, “Getting cash may require borrowing money, finding more investors or using your cash in hand. Having a list of prepared financial contributors for unprepared growth is crucial to having a business succeed.”
On the management front, because the business starts operating at a faster speed, the team gets stressed and finds less time to monitor quality, customer service, vendor relationships and more. Neglected items in the short-term can become problems later and intensify. As a small business owner, you may have been accustomed to a hands-on approach but you may find yourself taking on more of a corporate leadership position, which might be something you have not prepared for or are unwilling to learn.
Business Inc. states that taking the “slow” approach to a situation and reminding yourself of the passion behind the product or service will help you keep you moving along.
Underestimating the competition
Gustav Berle book, “The Do It Yourself Business Book” discusses how competition affects business success. There is always competition but you can know and understand to better differentiate your company. On Friday, Kelly Glass will discuss how you can track competitors effectively.
Remember, just like Peyton Manning and the Denver Broncos, you have to learn what you did wrong and make it better for the next time.
What is the best lesson you learned from a failure and were you able to turn it around?