Recent research on the small business failure rate reveals, “20% of small businesses fail in their first year, 30% of small businesses fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business.”
When looking further into these stats, you’ll see that whether a small business failed in its first, fifth, or tenth year, it’s likely due to a common small business pitfall.
You can prevent your small retail business’s doors from closing by not just being aware of the most common retail business challenges but by setting up your business to combat them successfully should they arise.
Here are five common pitfalls for small retail business owners and tips for addressing them.
Trying to Be Everything to Everybody
Opening our list of common pitfalls for small retail business owners is trying to be everything to everybody. In other words, you don’t have a target audience. Instead, you’re selling products that cater to a general audience.
Trying to be everything to everybody is likely costing you money and resulting in a low return for your maximum effort. Instead, it’s a much wiser strategy to define your target audience and sell to them. That way, your financial resources, marketing, and sales efforts concentrate on the people who will likely convert into customers.
To define your target audience, do the following:
- Take an in-depth look at the products you’re offering and identify the pain points you’re addressing with them.
- Explore the types of people who may be working through these pain points.
- Study your competition and their target audiences.
- Create buyer personas for your ideal customers.
- Continue learning about the demographics, behaviors, preferences, and other aspects of your target audience.
Another common pitfall small retail business owners must avoid is neglecting the importance of a healthy work-life balance.
Neglecting the Importance of a Healthy Work-Life Balance
Small retail business owners must wear many hats. In addition to wearing many hats, they may work long hours and blur the lines between a professional and personal life. If you’re doing this, you’re going to experience burnout at some point, and it won’t be pretty.
Burning out doesn’t just affect you, but your business, employees, partners, suppliers, and people around you as well.
Be a productive small business owner by doing all you can to avoid executive burnout and completely crashing. Learn to listen to your mind and body when they’re telling you need a break. Unplug when you aren’t working. Be sure to implement a regular exercise routine and practice good nutrition. Also, socialize and engage with your loved ones as much as possible.
An unwillingness to change and adapt is another common pitfall for small retail business owners.
Unwillingness to Change and Adapt
Don’t be the business owner stuck in their ways and insistent that they know it all. Don’t hire managers and executives like that either. Things change, people do also, and there is always room for improvement in yourself and your business.
So, it’s best to get on board with change and learn to adapt. Being open to taking your skills as an owner and manager to the next level is an essential first step in growing your willingness to change, adapt, and be more flexible in the way you run your business.
Furthermore, an unwillingness to change and adapt could also be the reason for a high turnover rate if you have employees.
Being Okay With Replacing Employees Instead of Retaining Them
Many small business owners view their employees as dispensable, meaning if they want to leave, they’ll replace them just as fast. However, this mindset is causing a high turnover rate in small retail businesses.
Your employees aren’t machines or objects you can replace. They’re human beings and should be treated as such. Instead of being quick to replace employees, prioritize learning how to retain them long-term.
You can start by hiring the right managers. Often, employees leave because of terrible management rather than a dislike for their job. So, be sure to hire managers who can multitask, make good decisions, motivate employees, communicate effectively, and lead by example.
Lastly, many small retail businesses don’t survive because they fail to develop a professional network and support system.
Failing to Develop a Professional Network and Support System
Many small business owners make the mistake of thinking they can do everything in their business, and it’s detrimental to their productivity. So, even if you have to run it yourself for a while, don’t do it forever.
While you wait until you’re financially ready to hire employees, you can still build a solid professional network and support system that can help you along the way.
You can develop a professional network and support system by:
- Joining groups on social media that are dedicated to supporting small retail business owners.
- Attending small business networking events and connecting with other owners.
- Hosting in-person and virtual events yourself that encourage small retail business owners to network.
- Leaning on your friends and family members running their own businesses for advice and guidance.
All in all, you won’t be able to run your business alone forever. Developing a professional network and solid support system helps you move through the ups and downs of running a small retail business more seamlessly.
Small retail business owners can lead a thriving company by taking the time to do some preventative maintenance for these five common pitfalls.
First, avoid trying to be everything to everybody by defining your target audience and selling to them. Second, appreciate the importance of a healthy work-life balance rather than neglecting it.
Next, adopt flexibility and adaptability rather than a stubborn attitude toward change and growth. Then, make employee retention more of a priority than simply replacing employees as they leave.
Finally, don’t try to do everything yourself. Instead, develop a professional network and support system you can lean on throughout your entrepreneurial journey.