Why Small Businesses Fail to Grow

There is more than one way for companies to fail. Companies fail to reach their potential, fail to get beyond mediocrity, or just fail to grow. While not growing isn’t always a bad thing it can lead to problems if the owner is still doing a lot of the work and still not making much of a living.

On the flip side, there are many reasons some small companies grow and others hit a wall. External factors such as market size, competition, and demand. Internal factors that have to do with operations and leadership. In every industry there are companies that grow and dominate, while others struggle or shrink and conclusively fail. According to Jay Goltz, here are what he believes to be the 10 factors that separate the two:


A popular topic these days is how driven the company is.  A small company is usually a reflection of the owners needs, desires and personality. Some owners have the mentality of wanting to take over the world, and some are happy just to make a living. Yet, there are those owners who want to play golf as much as they can. All in all, being the owner of the company, you need to display the type of work ethic you want your employees to have.

The right people

Building the right company without the right people is very difficult. Having the right people work for your company requires both a great hiring protocol and the stomach to make the changes that become necessary as the company continues to grow.  This is much easier said than done, especially when the person who you thought was the “right” person at the beginning turns out to not be the “right” person in the their roles.


Lack of standards and controls

This topic covers a lot of territory, including quality, service and problem resolution. The customer satisfaction rate will have a significant impact on the size of a company over the long run. Standards are essential. You need to make sure that your company has in place quality, service and good accounting standards-and the ability to measure them.

The customer attitude

Read carefully, it’s not the customers’ attitude but you and your company’s attitude towards its customers. Even though you may get a “crazy” customer now and then, word of mouth travels real fast. If you already conclude that there is no way to help this customer and treat them without respect then they will obviously tell their friends about the service you have provided for them.

"Service with a Smile" (on blackboard)


Technology can be a blessing and a curse if you own a small business. New technologies can be very helpful, but can also be very expensive. This can be one of the biggest differences between running a large company or a small one. Assembling financial, technical and staff resources necessary to solve a technology problem can be difficult if you run a small business.  By not keeping up with technology, it often costs a lot of time and money to do the “work arounds” that are necessary to get the job done


This includes everything from branding to advertising to market analysis. The way a company executes may be the major driver of its success, but how it is perceived is also crucial. The reality is that small companies can have a difficult time finding resources to help them with this.  Often local universities can be a valuable resource in providing advise, talent and networking opportunities to help move you to the next level


Stale products or services

The market is always changing, and your products and services may need to change with it. Depending on your product you may get lucky, the changes are slow and subtle; sometimes they can be dramatic. Stay close to the trends in your particular market.

Lack of investment

Inventory, new technology, a bigger facility, more employees or more equipment, growing companies suck up more cash than non-growing companies. Getting more cash may require borrowing money from investors. Some entrepreneurs tire of the demands and decide to slow down the investments and that will slow down your growth.

D04H6G Buy Hold And Sell Signpost Represents Stocks Strategy


Stubbornness is what helped the entrepreneur get the business initially off the ground, get through the learning curve, survive the recession and cope with every problem along the way. Policies and strategies that might have worked when you had about 20-30 employees may not be the same when you have 50-60 employees. For example, when you start to hire higher-priced managers who have different expectations than a $12-an-hour employee.


Vision, courage, fortitude, attitude, and of course the ever important corporate culture, all of which should create an inspired staff. Here is the real secret: passion is critical, but it can’t make up for deficiencies in the other categories.  Keep a sense of humor and treat all of your people with respect!


Here at Sharn we make it our responsibility to follow these 10 topics to make our company even better.

For more information on our products and services, check out our website at http://www.sharndisplays.com or give us a call at 815-464-9715.





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