Herman: John L. Herman Jr., Author

Small Business needs to become Smart Business...

In an era of Overspending, such as the one we just finished, there is an expansion of all things…including small businesses. More than 700,000 new small businesses have opened in each of the last ten years. With so much money around and people buying so much needless “stuff” even poorly prepared new business owners found a way to profitability. But there are far fewer spenders now which means the unprepared owners are being exposed and will be leaving the building faster than Elvis used too. In fact, even many of the smart owners are being taken down or seriously challenged now that there No Spenders.

In many ways starting a small business is like becoming a parent. It’s far too easy to “birth a business” and much harder to raise one to maturity in an intelligent fashion. And that is why we end with so many poorly raised and educated children…and too many failed small businesses. And we all pay for it one way or another.

Sixty percent of small businesses fail in less than five years, but their willingness to waste their money on rents, inventory, advertising and employees means the cost of these things rise and make it harder for the forty percent who win to make an even higher profit.

In an economy like we have today be prepared for an explosion of new poorly prepared business owners. People let go at age forty and above try to get a job but half-heartedly write a resume (one job in the last fifteen plus years) and then are looked at like spoiled milk past the expiration date by companies that are hiring. Many of those people have always dreamed of being the boss, and have actually saved a bit of money, and will “buy” themselves a job by starting their own enterprise. They discover amazing things immediately…like where paychecks come from…someone actually accumulates data, calculates amounts, deducts for whatever is required to be deducted, pays taxes to various agencies and issues a check to the worker! Whew…at their old job payroll was magical…they just got a check handed to them every two weeks with no knowledge of how it got there.

When they had a job people just went to the closet for a new pen, or called the tech guy when their computer went down, hailed maintenance for the flickering light bulb overhead, and cried about the lack of calls from customers because the boss did a lousy job of marketing. Own a business and call yourself for all of these issues. Stuff owners know very little about and didn’t think enough about when they plunked down their money and put out their shingle.

Let’s say you are planning to launch a business for twenty-five thousand of your hard earned dollars, or fifty to one hundred thousand which is more realistic…money you can’t afford to lose…why not spend some of it to hire a professional consultant to make sure you aren’t wasting time without making money?

• Posted: 2 February 2009
• Comments: 1
• Category: Business failure

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