There are about 3 in 5 small businesses shutting down within two years of start up and the statistics in terms of small business failures are frightening. Is there a magic ingredient that the remaining two has? A poor business model, poor products, bad sales staff are what those 3 businesses that closed down may have but every day we hear about small businesses surviving and thriving in the economic downturn. Is it possible there’s a secret to success? It may be.

A passionate owner or owners is one thing that most successful small businesses have. People who are absolutely passionate about what they do, love doing it, and believe in whatever product or service it is that they produce.

But there are passionate people who have had failed businesses and this means passion alone isn’t enough. When their owner has a clear sense of direction, a goal they want to achieve, as well as a strategy to make them achieve it, then small businesses can thrive. Small business owners need to know where they are going, and how they intend getting there.

Having a sense of how to run a business is also something small business owners need. An owner of a small business has usually worked for a company most of their life. They may not know how to run a business even though they’re passionate about their new venture and know where they’re headed. To keep your small business on track, you may need the help of a good lawyer, a good accountant, and a business-oriented partner.

If a small business is happy to stay small, then it’s often more successful as it doesn’t overreach its capabilities or financially over extend itself. You can keep your business going longer if you find a niche market that’s lucrative unlike a small business who invested all their capital in more machinery to handle big orders which they couldn’t manage to clinch. Slow and steady growth is the key to many small businesses’ longevity.

If you play to the strengths of a small business, then this will also help you. The benefits of dealing with small companies are what many larger companies appreciate and these include personal service, the care they take over quality, and the investments the owners have in keeping their customers happy are advantages that small businesses should push.

Another factor is that successful small businesses tend to stick to their knitting. They use professionals to market their business, do their books, and perform the tasks that are needed to run the business well. Even if their expertise lies elsewhere, a lot of small businesses try to do it themselves. Poor performance in areas that are essential to the business and even consequent failure is where this would lead to.

The secret to success? Most successful small business owners would say it’s a combination of hard work, common sense and passion.

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