When you start a business, your company is often like your baby. And like any parent, no one ever thinks their own baby is ugly. There are, however, times when a business isn’t living up to its potential, whether it’s due to poor cash flow, mismanagement or mounting debt. That’s why it can be very difficult to face the writing on the wall when it comes to the one thing you pour every part of yourself into.
If you don’t allow yourself to recognize where your business needs improvement every once in a while, you’re hurting what you care about most: the success of your business. So for the sake of your company, you need to perform intermittent reality checks. Here are three reality checks every business owner needs to recognize from time to time.
1. If You Build It, They Won’t Just Come
It’s fabulous that you make the meanest pizza in town, or your house plans are on par with some of the country’s greatest architects. But if people don’t know just how tasty your pizza is, or just how superior your designs are, how will they ever know to give your business a chance?
Unfortunately, your business is not a “Field of Dreams,” and just because you built it doesn’t mean they will come. You’ve got to invest in getting the word out about your business. People mean it when they say, “it takes money to make money.”
Being constrained by a limited budget is still no excuse. You can explore free ways of marketing your business, but don’t rely on them entirely. Perhaps you just opened a new burger spot in town. You could take to Instagram, posting picture after picture of your yummy burgers, picking up followers through hashtags and following locals. You could also pitch local reporters to cover your restaurant opening and offer them a free meal while they’re there.
All of these efforts combined, however, may not get you the traction you need. Maybe that coverage in the newspaper will get enough people through the door that they become happy customers and start spreading the word, but sometimes, it’s not always that easy. Whether it’s paid social media ads or public relations efforts, constantly evaluate which marketing strategies are and aren’t working.
2. There May Not Be a Market—or Enough of One—to Sustain Your Product
Does it seem like no matter what you do or how many marketing dollars you spend, you just can’t seem to hit your sales goals? The problem may not be with your marketing. Instead, it may be with the market itself, whether that market is over-saturated with similar alternatives or is just plain not interested in what you’ve got.
Consider a saturated market. If there are a thousand pizza shops in town, does your town really need another? Before you answer, consider what makes your pizza unique, and promote that aspect of your business. Maybe you need to rebrand as an upscale pizzeria, offering brick-oven-style pizza with luxury toppings and a great list of handcrafted cocktails. All of a sudden you’re in a league of your own and standing out from the pack.
There are times, however, when you’ll find out that saturation isn’t the culprit and that there just isn’t enough customer interest in what you’re selling. If this is the case, then you should strongly consider pivoting your business model.
3. Finances Need Babysitting
If you haven’t been checking in on your finances weekly, then you’re making a big mistake. Too much can go wrong if you’re not in the habit of babysitting your finances. For example, ask yourself, “Did I overspend on my budget this week?” If so, how are you going to make up for those unexpected finances? You can’t run a business without a steady cash flow, so make sure your books are organized and look healthy. Most small business owners aren’t financial experts, so utilize accounting software like QuickBooks and reach out to an accountant to get a better understanding of the process.
Make sure that your customers aren’t missing their invoice due dates by sending a detailed, simple invoice with clear payment terms and reminding them of their obligations. If you suspect any looming cash flow issues that can’t be solved any other way, you might need a small business loan.
Even though the best time to apply for a loan is before you need one, make sure that your finances are as close to tip-top shape as possible. If you wait until the last minute, and you need cash fast, you’ll find faster loans are always the more expensive ones.
Don’t be left worrying about money because you weren’t proactively checking in on your finances. Identify trouble spots early so you can tackle them while you are not under pressure.