😮😮 Shocking Reasons Small Businesses Fail – WHAT TO DO
A quick bit of housekeeping. Sorry for being absent the past week; I caught a nasty cold and spent the past week coughing and blowing my nose every 2 minutes. I was able to work on the plans for the upcoming #OpenForBusiness 2022 small business tour, but more about that at the end of the video.
Before we get to today's video, I'll leave you with this one thought. Being sick for a week, I spent a lot of time lounging around on my couch. After binge-watching nine seasons of 24, I learned if the idiot politicians and bureaucrats had spent less time thinking about the political optics of their decisions and listened to Jack Bauer or Chloe O'Brian, most of the problems would have been solved in an hour or two instead of an entire 24-hour season. With each season, Jack or Chloe would have a logical solution for the problem. Inevitably, the politicians would ignore or oppose every action with their ineptitude.
And this seemingly odd thought about a TV show brings me to my first point of this video.
Just like in 24, where the political leaders knew very little about protecting the country, we find ourselves in a similar situation where our current political leaders have a very poor grasp on the basics of economics.
Now, of course, this is not a political science channel; this is a finance channel, so we will not go into the pros and cons of each political party. We will simply state the facts. There is a specific party in control right now, and due to internal conflict between two factions within this party, no beneficial actions to remedy the current economic situation have taken place in the past ten months, well, at least for small businesses.
The large multi-billion-dollar conglomerates have been making record profit after record profit all the while, America’s small businesses are being crushed. Some would say this is the free market at play, and in some aspects, I agree; the problem is, it is not a free and open market when the corrupt DC swamp is purposefully stacking the deck against small businesses.
For some, the SBA EIDL program loans and grants have helped immensely, but for many, they are still in the endless line of waiting and hoping.
As you know, one of my businesses received the EIDL loan back when it was capped at $250k, we applied for the increase when the capped was moved to $500k, but we are still waiting. Another business of mine was initially denied in the first round when the money ran out, but fingers crossed, it looks like it might get funded under the full $2m cap. It has been a random crapshoot, some getting approved, others denied, without any real accountability from the SBA as to why some get it, and others do not.
I've covered all the pros and cons, and well, mostly cons, of the EIDL program in previous videos; check those out if you want more info on the botched EIDL rollout.
In general, absent a worldwide pandemic, the most common reasons a small business fails are lack of planning or too much debt when they start. We all know this, and countless YouTube videos show how to budget your startup or create a business plan, and while those are still true today, I do not feel they are the most significant things for you to be concerned about right now.
The failure to recognize the changes in customers' buying habits is by far your largest concern as a small business owner.
Take Chipotle, for example. Back in July 2020, they announced they expected 60% of their new stores to open with a drive-through window. This was to address social distancing concerns within their walk-in-only restaurants. Providing a drive-up window allows them to continue to operate even if din-in restrictions were in place.
Of course, sending all your customers to the drive-through can also cause logistics nightmares. Chipotle addressed this by improving their online and mobile app to provide a better on-the-go ordering solution for customers before their arrival. After improving their app, they saw an 8.3% increase in total store sales within the first quarter.
Chic Fil A addressed the drive-through concerns by making their drive-through lines take up their entire parking lot and had helpful and friendly staff outside with mobile POS tablets walking up to customers’ cars. Orders and payments could be handled before you drove up to the pickup window. This change allowed them to take three or four orders simultaneously, instead of one at a time at the drive-up speaker, allowing for faster service at the window, thus, reducing overall wait times in the drive thought.
Of course, I know what you are thinking right now; these are large multi-billion-dollar companies, they can afford these changes. Well, yes, but that doesn’t mean you cannot learn from them.
Maybe a drive-through works for your business; maybe it doesn’t. But think about it for a minute. What changes in customer buying behavior can be considered as opportunities for your business?
For example, over the past year, I have noticed some very creative car dealerships are offering at-home test drives of vehicles. The basic idea, rather than have a customer come down to the dealership, they can choose a vehicle they are interested in, and the dealership will bring the car right to the customer’s house, properly sanitized for safety. Then the buyer is free to inspect the vehicle and take on a test drive without breaking any social distancing rules.
Once the consumer is ready to purchase, most of the paperwork is handled electronically, limiting the in-person contact between sales staff and the customer.
Businesses that are willing to pivot and rethink the way they do business are the ones that will survive into this post-pandemic era. The ones that are stubborn and refuse to adapt will fail; it is that simple.
What changes in customers’ buying behavior have you noticed at your business? How have you adapted to these changes? Comment down below and share your thoughts.
I know this video is getting a little long, but there is one more thing crucial to your small business’s survival, and that is inventory. Right now, the country, and the world for that matter, is having a massive logistics nightmare loading, unloading, and transporting goods. Multiple reasons for this could take up an entire video, but I want to hit on one key point is buying local. Whenever possible, purchase products, services, goods, etc., for your business from other local small businesses.
This is not always an option for every business, in every town, for every product, but do your research. See if the item you need can arrive quicker and more reliably from a business 20 minutes away, instead of 20-hours, or 20-days away. Doing so will help your local fellow businesses out and reduce the strain on the overworked transportation system. Plus, you have the added benefit of getting to know other local business owners in your area. Then when they need a product or service, they will come to you and purchase from you.
This is one of the big reasons for my #OpenForBusiness tour to highlight amazing small businesses throughout the country.
Don’t forget to check out www.OpenFor.Business and register your business today. As you know, this is my small business awareness campaign, along with Aubrey Janik, Jamel Gibbs, Minority Mindset, Investment Joy, Rod Squad, Kenny Keller, Kristen Ottea, and Mark Moss; we will fly around the country in a helicopter landing at select small businesses nationwide. Do you want me to land the helicopter at your office or feature you on the program? Go to the website and register your business now. These spots are very limited
I am so excited to announce the support from AutoCorner, Namecheap, BestBuy, ZipRecruiter, Dun & Bradstreet, Constant Contact, and Unbanked. Without their support, this nationwide small business helicopter tour would not be possible!
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