Pick your jump into a small business with care in this global financial market downturn

Please note this may be or may not be inspirational to you ....

I was reminded this week why I have chosen to grow a relationship business with Nuskin when I re-read this article by Julie. My business can never close unless I choose to stop taking to others about it. And in this crowded marketplace having the one story that is bigger than all anti-aging stories you read about or hear in TV is a market advantage ( NU SKIN has products now that slow down the ageing process- no one else has this)

WHY DO SMALL BUSINESSES CLOSE?

The SBDC has completed its Small Business Closure Study, which explored the reasons why small businesses have closed. The study sought to determine the extent to which the decision to close was driven by the proprietor’s own choice or was forced upon the proprietor as a result of, for example, the business becoming unviable. The results suggested that one in two small businesses in WA which closed did so for reasons of personal choice.
The study was based on interviews with 409 former small businesses proprietors whose business names were deregistered between 1 January 2003 and 31 December 2004. Small business profitability was identified as a main indicator of whether or not the decision to close the business was driven by choice or forced.
Retirement and change of lifestyle were the most common and main reasons cited for small business closures. Approximately 52% of respondents indicated personal reasons, 30% specified business/management/preparation issues and 17% cited the impact of uncontrolled issues as the main reason for the business closure.
The study found that around 39% of small businesses were profitable and 61% were not profitable immediately prior to their closure. The reasons for small business closure differed between profitable and non profitable businesses. Results indicated that:
• Respondents operating profitable businesses were more likely to indicate retirement or that they had bought or established a different business as a reason why the business closed, as compared to non-profitable businesses.
• Respondents with non profitable businesses were more likely to mention the following reasons for business closure as compared to profitable businesses including: difficulty in obtaining capital or a lack of capital, insufficient business preparation, poor marketing of the product or service and predatory behaviour of a competitor with greater bargaining power.
Survey respondents were also asked what they would do differently were they to start their business again. Improving the initial business preparation and planning was the most common change mentioned by 21 per cent of the respondents. Other changes included developing and evaluating marketing strategies, changing the business structure or set up of the business, establishing the business with adequate working capital and changing the location of the business.
For more information on this study, contact Juliet Gisbourne on +61 8 9220 0222.