Tag: small busienss

I’ve often said it takes a special breed of person to be an entrepreneur. Being your own boss, starting your own business and growing that venture will test you to every limit you have. Personally, it will either make or break you. In the boutique and handmade world, we see trends come and go, we see hot products everyone wants… supply and demand ebbs and flows, but what makes a small or micro-business be able to stand the test of time?

I’ve personally been the owner of my own small business ( Goosie Girl) for almost 14 years now. The Wall Street Journal reported in September 2013 that 56% of Americans thought that they were capable of launching their own company while 9% actually took the plunge and took steps to start a business. Against this backdrop of optimism and confidence stands another set of sobering statistics that outline the causes of small business mortality. Small business failure rates vary, but from 50-70% fail within the first 18 months.

To gain insight to the contributing factors to business mortality, researchers at the University of Tennessee studied failures of thousands of small businesses and attempted to identify the primary culprit leading to demise. They grouped their findings into broad categories but “drilled down” within each to identify root causes of failure.

The leading cause of business failure was determined to be “Incompetence”. Fully 46% of failures could be explained by this broad-brush term. The specific behaviors that underlie this headline, however, are fairly specific and revealing. These include:

• Taking an emotional approach to pricing
• Non-payment of taxes
• No knowledge of industry pricing conventions
• No knowledge of financing requirements and conventions
• No experience in record-keeping
• Living beyond the means of the business
• Lack of planning

Next in line as a primary contributor to business failure was “Unbalanced experience or lack of managerial experience”. This condition explained 30% of small business failures and was manifested primarily by poor credit-granting decisions.

Eleven percent of failures were attributed to “Lack of experience”. Specific shortcomings that proved lethal included the failure to maintain adequate inventory, no knowledge of suppliers and wasted advertising budgets.

*Source http://isbdc.org/small-business-failure-rates-causes/

The point is that few entrepreneurs, especially first time entrepreneurs, are ready for what comes at them from a people perspective when building a business. In order to succeed, they need to be able to step outside of their comfort zones and reinvent themselves – finding the courage to do things they never thought they’d have to do, or that they’d be capable of doing. I have often said, in business you must constantly reinvent yourself, or find new products, or find new ways of doing the important things which keep a small business afloat such as promotion, networking and marketing.

So how can entrepreneurs get out of this conundrum and learn to reinvent themselves while at the same time reinventing their business?

• The first step is two-fold: recognizing that reinventing yourself is just as important a task as reinventing your business. Then, once you’ve convinced yourself of the imperative, doing an inventory of your challenges. No one likes to admit weaknesses, but just as you look for the strengths, weaknesses, opportunities and threats (SWOT) in a business deal, use that same rubric on yourself. Where are your blind spots? What do you struggle with? Be honest.
• The second step is to assess your own personal motivation. You’ve done your personal  analysis and find that you struggle with sales, or networking or at delivering bad news. The next step is making sure that this is something you actually care about improving. What’s in it for you to get better at this? Will it help your company grow and thrive? Probably. Will it help you become a more effective businessperson? Will it help you achieve your goals and ambitions? Definitely. Embracing your internal motivation is an essential step for making anything happen, especially personal transformation.

• Finally, the last step is to beta test your newly reinvented self. Try out the new behavior. Look at how others do it, and ask friends for help. Maybe even enlist the help of a coach. If beta test number one doesn’t work, try again. Tinker with the behavior, or try it in a different setting. Remind yourself of your motivation to go out there and do it, and just like you’d beta test and improve a product, do the same with this new version of yourself.
• *Source: Linked In Article by Andy Molinsky

You miss 100% of the shots you don’t take

there are many reasons to tweak your business model–or to try out a whole new one–that make perfect sense. If you do it thoughtfully, it could be the best business decision you ever make. ~ Entrepreneur Magazine

If this information has urged you in the direction of reinvention of your small business,and tipped the scales for our readers who are makers looking for a new venue, such as Gypsy Spoonful here are the top three tips on HOW to do it sourced from Entrepreneur Magazine and some experienced business coaches such as Karyn Greenstreet, a Philadelphia-area small-business coach specializing in self-employment and business reinvention as well as Steve Strauss, a business speaker and author as well as a columnist for USA Today

1. 1. Know When to Make a Change : Timing Is crucial. The first step is deciding if it’s the right time for a change. (Every.Single.Day. I receive applications from makers wanting to abandon the venue they are currently selling on and joining up with Gypsy Spoonful. A popular marketplace has definitely changed, and many are jumping ship. If it’s working for you, I’d advise to keep selling there, but NEVER keep all your eggs in one basket. A variety of marketplaces are GOOD to reach different customer bases. By all means, if it’s not working for you anymore due to policy change, lack of support, mass produced or imported items being sold on the same venue and undercutting your pricing… then it’s time to move on. We are entering a new season for handmade~ and the time is ripe for a marketplace solely dedicated to handmade goods.)
2. Decide What You Want
   After the decision is made to change, you need to decide what type of change is necessary to meet your goals. “Once you decide there’s something you can do better, you need to decide whether to make a little tweak or a major overhaul,” Strauss says. “You have to decide what’s best for your brand.  (Learning a new craft and/or adding a new item to your product line up can bring new life to your handmade microbusiness. Once you decide what it is you truly want out of your business, It is so true to say “Entrepreneurs have more ideas than they have time for. The absolute first stage is deciding to cut off all those other ideas and focus on one. Making a decision to make a decision is the hardest thing for entrepreneurs to do.” Once you have clarity on your goals and values, making a decision should be easy. (We often ask potential new members to read what Gypsy Spoonful believes about handmade, and small business, and doing business in America before committing to applying as a maker. You can see this our ideals and values by clicking here.)
3. The next step is something every business owner should be experienced at–making and following a business plan. “You need to act as if you’re starting from scratch,” Strauss says. “You need to think it through thoroughly, figure out who the competition is, how you are going to beat them and what the costs are. Strauss and Greenstreet suggest sharing your plans with other business owners or a mastermind group. “Entrepreneurs tend to rely on intuition a lot, but you need to make sure other people think your plan is a good idea,” Strauss says. (This is why Gypsy Spoonful has been built around the concept of “community”, we rely on our “mastermind group” to support, share and build each other up. Being an entrepreneur can be a lonely venture, if you are in community with other like-minded small business owners, it makes it more enjoyable, less stressful and you can learn from other’s successes and mistakes as well).

“Business owners sometimes need people to bounce things off of to keep them from going off in crazy directions,” – Pamela Wilson

During the transition, you’ll likely be running two shops at once as you phase out the old business model and ramp up the new one. “Sometimes reinvention means running two businesses simultaneously for almost a year,” Greenstreet warns. “It’s overwhelming, and business owners are often so excited about the new model, they want to let go of the old model. It’s like going through a long divorce before committing to a new relationship.” The solution is to create a detailed exit strategy. (Gypsy Spoonful doesn’t want to be the only venue you’re a part of, we just want to be the best and favorite one 😉  )

Entrepreneur’s article suggests to : “Be transparent through the whole process with vendors, customers, employees and, most important, your family. Give everyone notice that changes are coming, when they will happen and what it means for them.”

If it’s time to reinvent your business and switch venues, and hop aboard the NEW home for handmade, we encourage you to go through the application process: Get the process started here