Why don’t small businesses prosper?

Expansion and growth are ideals that are at the base of entrepreneurial action . However, the natural cycle of birth and evolution does not always occur as a cause and consequence. Some small businesses, in fact, close their doors before they are five years old. Many other companies in this dimension are moving forward, but sometimes they seem immersed in mere economic survival. Why does this issue occur?

The very requirement of daily work in a small company with a high volume of tasks and little workforce to carry out this work means that the main attention of the owner who, in practice has the role of being one more worker, does not leave room for Innovation and creativity to open new doors for the future. The day to day centers all the attention of the team.

 

Revenue and expense ratio

Small businesses also have to face a high level of expenses, something that not only occurs when the entrepreneur has the place of his business in property, but also when he has a space for rent because the rates that are handled in the Real estate market for commercial purposes are substantial. Faced with this excessive level of expenses, if the business is doing well, income allows them to respond to them and guarantee an optimal quality of life. However, it is likely that the benefit does not exceed the point of being able to allocate a portion of the money to an expansion plan.

Mindset of Prudence

Small businesses can also remain conditioned in a comfort zone that is a manifestation of the project owner’s own attitude, which does not raise certain issues in practice because he fears that the price of the expansion will be the loss of the achievements made until that moment. Therefore, fear is a real brake.

In other cases, it is a personal decision aligned with the expectations of one’s own lifestyle that leads the protagonist to make an approach of what would be the responsibility of a higher level business in his own existence. For example, dose of stress, lack of free time, more worries and obligations. From this perspective, the balance is inclined to the option of not growing the company to a higher level to have more peace of mind against unforeseen events.

Digital transformation

There are still many small businesses that are not perfectly integrated into the online scenario. They do not have a web page and social networks. This absence of digital innovation can not only avoid commercial prosperity, but also the very viability of that idea that although it has lasted until now without using these types of tools, now it must make a new elaboration of its future because the context is no longer the same as that of ten years ago. A company can be stuck in an interpretation of reality that is not objective with what customers demand at this time.

 

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