Make sure your home service company goes the distance by avoiding common small business pitfalls and mastering the essential skills required to succeed long-term.
If you're looking to start a business or you need tips to ensure your home service company goes the distance, you've come to the right place. Keeping your business afloat is a balancing act between avoiding common small business pitfalls and establishing effective processes and procedures.
In this article, you'll learn about the main reasons many small businesses in the home improvement sector fail. Plus, you'll discover advice about what to focus on to help you avoid common pitfalls.
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The Main Reasons Small Businesses Fail
Everyone who's interested in setting up a business has probably heard that the majority fail within five years. In fact, according to the Small Business Administration, only two-thirds last two years and half survive five years. If you don't want to become another statistic, there are clear steps you can take to foster the success of your small home service company.
Below are the most common reasons small businesses fail.
As a small business owner, you're the most important element of your business. Every action you take sets the tone for your output, and the more intentional you are, the better.
Failing to communicate, not putting people first, and shirking responsibilities are three of the most harmful behaviors a leader can demonstrate. Further down in this article, you'll find a list of the top traits all successful leaders foster to help guide you as you navigate business ownership.
Poor Customer Experience
It goes without saying that a poor product or service will hamper success. However, you could be the best painter, plumber, electrician, or construction contractor, but without great customer service, you'll probably fail.
In today's consumer-led world, people are free to write reviews and leave comments all over the internet. But even if this weren't the case, your goal should be customer satisfaction. Happy customers tell their friends and family about the great service they received and help build your reputation.
Fear Of Failure
Fear is a natural part of life, and how you deal with it can be the difference between success and failure. If you see failure as something shameful and upsetting, you'll struggle to succeed. Success is usually the result of being able to endure multiple failures unflinchingly.
That doesn't mean you should seek out failing. Rather, you should view setbacks as learning opportunities and stand strong in the face of adversity. All businesses experience failures, but only successful ones learn and grow from them.
Trying To Be Everything
One of the biggest issues most business owners have is an inability to delegate effectively. After all, it was probably a strong work ethic and the ability to produce results that led you to start a business in the first place.
While doing everything yourself is usually essential in the beginning stages of a home service company, delegation should take priority as you grow. Learning how to recognize your strengths and weaknesses and play to them is vital for long-lasting business success.
Poor Hiring Practices
It goes without saying that the people make a company. Even if you're hiring for entry level jobs, you should make sure every employee is a fit for your company culture. Just one person with a bad attitude can make a huge difference to the morale and output of the entire team, so hire wisely.
Here are some tips to help you hire home service contractors wisely:
- Have a clear picture of your brand identity, values, and mission so you can write ads that appeal to like-minded folks.
- Design a standardized hiring process that's tailored to the structure and size of your business.
- Create a realistic, detailed job description.
- Ask people you trust for referrals.
- Limit the number of applicants and timeframe for making applications.
- Hold two interviews to get to know each candidate, and never interview potential hires without someone else to bounce ideas off of.
- Communicate professionally and effectively throughout the entire process.
Not Training Staff Well
Hiring the right people is the first step, but training them in your way of doing business is just as important. You should have a clear, consistent process when it comes to onboarding to ensure your staff understand what you expect from them. The better you communicate your expectations and standards to your staff, the easier it'll be for them to do a great job.
What's more, investing in training and development is one of the most affordable, best-received company perks. Take care of your team and they'll take care of you.
Not Having A Strong Brand
As a home service company, you might think branding and marketing are a bit frilly and unnecessary. However, in an increasingly competitive marketplace, their importance can't be overstated. How memorable your company name, logo, and imagery are plays a huge role in your continued success.
Establishing a brand image and personality lets your target audience know what you're about. For example, you might decide to make being eco-friendly part of your brand. By including imagery and messaging that advertise your values, you'll attract people who share those values.
How To Avoid The Pitfalls Of Small Business Failure
Now that you know why so many small businesses fail, let's look into how to avoid pitfalls and streamline your operation for success.
Learn Top Small Business Owner Traits
As a small business owner, you're expected to turn nothing into something. If that doesn't sound impressive, let's put it another way: Company owners use their intelligence, experience, and understanding of an industry to solve problems for the public and create jobs for people. That's a pretty big deal!
To succeed, you need to have the drive and courage to succeed and take responsibility for other people. Other traits of successful small business owners include:
- Loving your work and taking great pride in doing an exceptional job that delights customers
- Having the vision and self-awareness to identify challenges and problems and solve them on the spot with minimal support
- Being able to tackle setbacks and approach difficulties with a positive attitude and having the persistence to push through challenges
- Delegating effectively when you can't meet all the demands of your business and being able to assign the right jobs to the right people
- Maintaining curiosity about the industry you operate within and best business practices as they constantly change and evolve
- Being confident in your ability to achieve your short- and long-term goals and make decisions that lead to continued success
Make Marketing A Priority
It's a good idea to invest heavily in early marketing campaigns. Make sure you have the budget to effectively market on traditional advertising channels as well as social media, search engines, and lead generation. In addition to having the funding in place, you must have a strong brand identity.
A clear unique selling point differentiates you from competitors and gives you a theme to develop marketing campaigns around. Your USP should be based on extensive research into your target audience to ensure you get a good ROI. Working with a digital marketing agency or freelancer might be a good idea if this is an area you're not confident in.
If people identify with your brand and associate professional, attractive imagery with your business, it'll be easier to beat competitors to winning jobs.
Don't Give Up
Remember that the earliest stages of a home service company's life are always the most volatile. While you're establishing yourself and your position in the local marketplace and learning what your customers want, expect difficulties. These growing pains will become less and less as your reputation, expertise, and confidence increase.
Not believing in your ability to succeed is one of the most common pitfalls. It prevents people from pushing harder, taking risks, and not taking no for an answer. As long as you maintain good business practices and don't check out when times get hard, you're in a great position for business success.
Manage Cash Flow
Aside from the above intangible elements of running a business, the most tangible cause of business failure is poor cash flow. It goes without saying that lack of cash is likely to lead to issues within a business, and you can take steps to maintain healthy cash flow.
First off, make sure you create and maintain a forecast with information about what's coming in and going out. Use this forecast to project sales up to five or 10 years into the future, with worst- and best-case scenarios. Update your forecast every six months or so to ensure it's up-to-date and relevant.
Always send out invoices on time and have a process in place to quickly follow up with customers who haven't paid.
Avoid Unsustainable Debt
Most business owners leverage credit for success, but you must avoid the pitfall of getting into a cycle of debt. If you keep borrowing money to pay off previous debts, you're in trouble and your company might not be sustainable. This is why it's so important to have a healthy pipeline of leads, an excellent branding and marketing strategy, and positive cash flow.
If you find yourself stuck in a cycle of debt, it's time to work on lead generation and find a way to increase your output and make more money.
Make Data-Based Decisions
The beauty of conducting business online is the ability to analyze success in real time. Marketing isn't about guessing what people want anymore. It's about observing the behavior of your target market and aligning what you do with them.
You can gain insights about your demographic online, from your website and social media pages. Analytics give you data on how people use your website, which pages they stay on, and their previous browsing history. You can see which links they click and which blog posts inspire action and tailor future campaigns based on this data.
Move With The Times
Being adaptable is a crucial trait for all small business leaders — so much so that it gets its own category. With technology causing society to evolve and move at a faster pace than ever, being able to move with the times couldn't be more important. Best practices are changing all the time, and operators need to keep up with the changes to remain relevant.
Master Small Business Social Media
Social media is a part of most people's lives these days. You can create a community for your clients on social media, with links to helpful blog posts offering tips and advice. Furthermore, you can use social media to create advertisements targeted to your client base, with ads that land at just the right time.
By interacting with comments on social media, negative and positive, you show how much you care. People want to see evidence of your values in action, and social media is a great place to do it.
Ace Employee Management
Once you're big enough to hire an employee or two, make sure you take the process seriously. Employees are the frontline ambassadors of your business, and the way you manage them has a defining impact on your company's success. Some tips for excellent management include:
- Leading from the top
- Treating everyone with respect
- Being clear about expectations
- Clearly defining job roles
- Introducing a code of conduct and mission statement during the onboarding process
- Continually investing in training and developing
- Recognizing and rewarding effort
- Listening to concerns and swiftly taking action where necessary
Always Have A Pipeline Of Leads For Contractors
One of the best ways to ensure you succeed as a contractor business is having an effective lead generation strategy in place. At CraftJack, we can get you real-time leads from potential customers looking for contractors in your area. With a steady stream of customers on-hand, it's much easier to make plans for the future.
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