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Doing Business Right - SME Business Digest
DOING BUSINESS RIGHT - 6 Eventual Damages To Avoid In SMB Failures
- BY  ANUSHA RAMESH
You  might have heard or read many busted-stories of small businesses. How many reasons you must have pinned up as true and practical so far?  Or how many explanations you might have evaluated from those stories narrated by such owners. Just read this article to find how far your estimate goes with the staging of this ‘six damages to avoid in SMB failures’.
Article Published: 'Invitation Issue' of SME Business Digest, a Digital Business Magazine - Feb-Mar2021
“80% of the small business close at the startup stage”. Have you heard this analysis?  Similarly, 8 out of 10 new businesses fail in the first 10 months. Maybe a true analysis or a perpetual myth! Believably, you and I have perceived some-more similar analysis from the western regions of the world.

Some of the small businesses from India have a mix of sentimental values and traditional views. This means there would be more ‘yes’ than ‘no’ considering the social changes. For instance, a jobless friend would be offered to take the Manager’s job instantly to get a twin advantage of taking up the job and filing the post with a reliable person. Will it cover the importance of failure in achievement?

“There is no way we can realize our full potential unless we fail” is a mark of motivation, but it can’t be tested at the level of start.
On the verge of any business failure, most of the owners pin up ‘working capital’ or ‘further investment’. Of course, some owners reason out market influences such as competition or taxes. Normally the business does not fail until certain poor decisions in management make it fail.

How many business owners are ready to accept their failure of poor leadership, lack of experience, wrong decisions, or dissatisfied customers? 

Most SMB (Small and Medium Business) units get a nose dive because they ignore simple points simply. Narrowing down those points would land in ‘people management’ and ‘relationship’. The financial failures start at the surface level and that may lead to an ungovernable situation. The further pretence of knowledge eliminates moral and ethical considerations from management planning. Finally, a pessimistic vision could permeate operational flaws easily.

In many cases of business planning, we neglect to focus on corrective flaws in productive outcomes and better turnaround plans. This may amplify in situations and perceive to be extraordinary and without a stepwise process.

What is important is an understanding of the basic problem and orientation of management towards action around it.  How many small businesses are considering these practical factors during business planning? 

Irrational thoughts and actions demonstrate the ‘unstructured decision making’

REALIZE PEOPLE CARE
Do recognize that people join your business for their benefits. It is as simple as you look for profits from your own company. There are 5 expectations from employees. 1. Salary on-date 2. Statutory benefits without fail. 3. Compatible Workplace 4. Promotions and Growth Opportunity 5. Suitable Training. If they feel a pinch in one of these, all your abstract motivation may not work. They would be searching for another place to get these advantages.

BUDDY-EMPLOYEES
One of the major weaknesses in small and medium businesses is to have few employees close to the owner. They might have won the hearts of the owner by trust, loyalty, commitment or what not! They would be identified as powerful persons in the company because of the influential relationship with the boss. This might cast away certain good people in the company and indirectly, the business will lose good employees. Also, at a point in time or maybe over years, such close employees will become vulnerable and cannot be handled like every other employee. Business owners will have challenges to deal with such ‘heroes’.

SHARING WEAKNESSES
Employees love company stories and they use them as vantages for their safety. Let the stories remain in their levels. Be a boss and do not disclose your business battles like financial-hurdles or business scrambles in real-time situations with individual employees. At certain points of time, they may come close to your heart. Yet, stand away from deep discussions.
LOW-SKILLED PEOPLE
In the initial 3-4 years of your business, it is recommended to take people with ‘minimum experience’. It is because they know the market conditions, functional responsibilities, and the actual job. You can quickly meet your plans of the business through their performance and functional activities. On the other hand, your selection on raw or inexperienced people may reduce overheads initially, but you would end up in continuous training, slow revenue, recurring expenditures, and challenges in projects. Also, if you try to train them, they may learn from you and at a peak period, there are chances for them to leave your company for betterment.

FRIEND AS A PARTNER
Friendship with Business Partnership is more of a sharp relationship. It may strain if it is not in accepted terms. Any slight exception might cause serious cuts both in business and in between friendship. Normally, family and friends rarely plan any worst case scenario. Also, breaking away will lead to mental strain. It would also be difficult to part the assets or financial burdens. It may even divide the entire families and friendship groups. A lot of people might have heard or experienced this situation. There could be very few exceptions in this case.

VENDORS BECOME CRITICAL
Vendors are the ‘real-strength’ of the business. Their major expectations would be to get their payments on time. Balancing vendor management is difficult, but a process oriented method  will work out easily. Else, the company has to undergo critical management decisions.

Gradual failures within a timeframe in business affect the business deeply. Keep these six major factors in mind. No matter what business we do; it will have new ways of performing things from those corners that we don’t expect.
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