Every business has its strengths, those things that they consistently do well to get people talking, attract new business and keep customers coming back. Always a good thing. Unfortunately, strengths can sometimes cover up business weaknesses or flaws so they don’t get the attention they need.
For clarification, business weaknesses are areas where improvements need to be made because your current situation leaves you vulnerable to economic pressures, market forces or aggressive competitors. In short, these are the things that hurt long-term, sustainable profitability.
Here’s an interesting way to look at weaknesses. IF you were going to sell your business, what things would make it less attractive to a potential buyer? Note, the things that would make it attractive are typically strengths!
7 Small Business Weaknesses
#1 – No documented systems and procedures. As a result, critical activities including marketing, sales, hiring, service delivery, billing and customer care are not easily repeatable by others and are often inconsistent, inefficient and ineffective. Taking the time to write down how you handle routine tasks saves time and money, makes training easier, and ensures customers expectations are consistently met so they keep coming back. Need help with this one? Check out my Ultimate Systems and Procedures Guide for Small Businesses.
#2 – Business is TOO dependent on the owner or one key person. Some of this is due to a lack of written procedures but is also due to a lack of delegation. A lot of small business owners are reluctant to delegate tasks to others because it requires time to train them or they simply don’t believe others can do it just as well. With documented procedures, training and delegation are a lot easier. And you may just find that others do it just as well – if not better! The more you delegate (or outsource) to others, the more time you have to work on more important tasks like growth and profit improvement.
Related: How to Delegate Effectively
#3 – Too many eggs in one basket. If your business is too dependent on one or two ‘big’ customers, your business is far more vulnerable. It’s easy to become content or complacent when you land a big account. But mergers, acquisitions, new competition or even one bad experience can cause the customer to leave and result in a major revenue loss that you can’t quickly overcome. While you want to keep your big (and small) customers happy, you need to make getting new customers a priority too! Invest the time and resources to grow your customer base. You’ll improve your revenue and profit while reducing your long-term risk.
#4 – No proven methods for revenue growth. If you needed customers quickly, what would you do? Whether you need a lot or a few, every business should have 2-4 proven ways to get new business. Things that consistently work. Things that you can depend on to deliver results. Trying new strategies is necessary to take advantage of changes in the market and new technology. But don’t eliminate what works. Simply add new stuff to your mix and be consistent! Only eliminate a tactic when it no longer produces the results you want or need to make it pay off. Click here to download 155+ revenue and profit building ideas.
#5 – Lack of differentiation. All products or services become commodity-like over time. Even prescription drugs become generic eventually! So what are you doing to make your company or services stand out for people to take notice? Why should they choose YOU? Differentiation for small businesses can take an assortment of forms relating to convenience or quality, including people, service levels, hours, systems, location, product variety, results, etc. What do you do so well that you can guarantee it or create buzz around it? You only need ONE! With differentiation, you no longer compete on price alone and your marketing is a lot more compelling … so it works!
#6 – Wrong people supporting your business. You can’t do it all. Your success as a business owner will depend on others — employees, subcontractors, and vendors (suppliers). So choosing the right ones and developing them is a key to sustainable growth and profit. Don’t settle or depend on just one. Invest the time and resources to select the best and build those relationships so everyone benefits.
#7 – Lack of cash. Do you focus on sales at the expense of profit and cash flow? It’s a common issue. Getting more customers or growing revenue does not guarantee more profit, personal income or adequate cash to sustain your business. Focus on the bottom line. Grow profitable sales and stop selling what you can’t make money on. Establish a pricing strategy that supports profit, not just sales. Manage your expenses, especially labor, to sales levels. Bill promptly and extend credit wisely. Get a letter of credit before you actually need it and use it sensibly.
Any opportunities for improvement? If so, pick one and start focusing your efforts there. Little improvements can produce big results – more time, more money and more control. So make the commitment and take action.
Ready to Put Your Business on the Path to Success?
Would working with a business coach help you take your business to a whole new level? Then let’s explore the possibilities with a complimentary consultation. It’s a chance to get to know each other, discuss your goals and the obstacles that hold you back. Together we can determine if there is a good fit between your needs and my services.
To learn more or schedule an appointment, call me at (856) 533-2344 or drop me an email Joan@HybridBizAdvisors.com