Is Your Small Business a Hit or a Miss? - Is Your Small Business a Hit or a Miss?
Is Your Small Business a Hit or a Miss?
After Meret Lenzlinger founded the residential architecture practice that became LOCAL Brooklyn in 2004, she admits she faced “a few lean years.”
“Every time I thought this wouldn’t work out, another small job would arrive just in time,” Lenzlinger says, and she’d renovate another kitchen or bathroom.
Then came the turning point: she acquired a partner, Jim Yohe, and together the two of them designed and oversaw the construction of a new four-story condominium building. “That was two years of work; enough for us to be able to open an office of our own,” she says.
Lenzlinger racked up other “pluses”, too. The firm earned referrals from happy customers. They learned how to be flexible and adapt to gloomy economic times. In 2008, when rivals couldn’t or wouldn’t adapt, LOCAL Brooklyn was willing to take on smaller projects. It survived the recession and profited from the economic recovery.
“I’ve learned to evaluate my environment realistically,” Lenzlinger says. “I might lose a client – but as an entrepreneur, I never lose my job.”
Other small business owners can evaluate – realistically – whether they are bound for success or sowing the seeds for future problems as they set out on their own entrepreneurial journeys. All that’s required is the honest answers to a handful of simple questions.
- Is your cash flow adequate? One of the biggest reasons small businesses fail is finances are out of whack: sales growth is stagnant; margins are negative or anaemic; and the business can't generate profits. Can you find ways to be flexible, as Lenzlinger did, until you get a big break? Living on hopes and dreams isn’t sustainable.
- Are you getting new customers? If so – especially if they are coming via referral from happy and contented existing customers – this is a great sign. If not, why not? Is your marketing team failing, or does your business just not offer anything appealing to customers any longer? Be ruthless with yourself.
- Is your business growing and changing? If you’re still doing precisely the same thing that you started off doing, making the same widgets that you were making five years ago, you should be hearing alarm bells. You should have a roadmap for growth, involving innovation and change that is tied to where clients are going. Fail to plan for growth and the odds are that you’ll stagnate. Lenzlinger still designs the occasional bathroom, sure, but that’s not the focus of her (much larger) business these days.
- What kind of feedback are you getting from your customers and other stakeholders? Are you making their lives easier and more manageable, or are they irritable because you deliver late, they think your products aren’t of as high quality as they expect or want and have to deal with grumpy employees?
Of course, there’s no simple, straight forward formula for making a small business successful. But simply keeping in mind some of the issues these questions bring to mind, and being responsive to them, may increase your chances of success.
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All views and opinions expressed by the entrepreneurs interviewed are their own and do not represent those of Bank of the West WE Source, Bank of the West, or its affiliates.