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Mississauga Life Early Spring 2015 : Page 14

FEATURE | SMALL BUSINESS Why Businesses Fail As the famous quote goes: “Those who cannot learn from history are doomed to repeat it.” The adage holds true in many environments, and the business world is certainly one of them. It’s crucially important for business owners to understand the reasons large numbers of upstart companies fail; these common pitfalls affect businesses in all industries, even those that have been around a while. According to a recent Forbes article, new business failure rates are largely due to five factors: 1. Being out of touch with customers. Well-designed social media campaigns put customers and business owners in direct communication, and businesses that don’t take advantage of these tools lose customers to more responsive competitors faster than ever before. Engaging customers in meaningful dialogue about the business and making a concerted effort to address feedback are crucial. A lack of differentiation. In business-speak, “differentiation” or “value proposition” refer to the way a company distinguishes itself from competitors. For example, WIND Mobile provides an alternative to the abysmal customer satisfaction rates of the dominant conglomerates, through flexible and customizable service plans and superior customer service. It’s a simple yet powerful illustration of what the business offers that the customer can’t get somewhere else. An unclear or uncommunicated value proposition. Identifying a value proposition— or the primary reason customers should seek your product—is only part of the equation; businesses also have to find a way to communicate that differentiation to consumers. Straightforward, clear marketing messages targeted to a specific customer base are the way forward in this regard. Leadership dysfunction. The vast majority of successful small business owners share five common characteristics: dedication, flexibility, confidence, resourcefulness and sociability. Shortcomings must be bridged, either through professional development or the delegation of core tasks to capable partners. Ill-fitting business models. A large number of business failures can be attributed to trying to force the proverbial square peg into a round hole. Though it’s a large business, James Tonin is a globetrotting freelance writer. When Target Canada’s recent difficulties are an excellent example; he’s not contributing to Mississauga Life, you can find him the parent company assumed its brand presence would be powerful enough in and of itself, without understanding and flexing his brain by writing screenplays. adjusting for the Canadian retail marketplace. 2. 3. 4. 5. Of course, no business can grow without resources, no matter how ingenious its marketing, branding or differentiation efforts may be. Even with the rise of alternative funding models like crowdsourcing, most money still comes from the same types of sources it always has: banks, lending programs like the Business Development Bank of Canada and the Canada Small Business Financing Program, angel investors, and strategic reinvestment of profits. Preparation is key for business owners intent on taking their enterprises to the next level, and that’s where organizations like the Mississauga Business Enterprise Centre (MBEC) can help. Strategic Resources for Local Business Owners MBEC is a public/private partnership, with cooperation from the Province of Ontario and the Ontario Network of Entrepreneurs. The centre offers free resources, including extensive information on competitive intelligence and financing-related issues, as well as business plan reviews and Young Entrepreneur programs. Members can also take advantage of low-cost seminars and professional development opportunities. The Southern Ontario Fund for Investment in Innovation is another uniquely local resource that extends loans of up to $500,000 to entrepreneurs developing new products or services, exploring new markets, or working on process improvements to current standards. Loans are also available to business owners looking for late-stage commercialization financing. Organizations like MBEC help both new and established businesses discover and develop the tools they need to drive sustained success and future growth, and through them, business owners have a much better chance of navigating the stormy waters of today’s rapidly evolving commercial landscape. Mississauga's Entertainment Hub -Shopping, Events, Music and Dining on the Waterfront. Always On! Always Electric! 14 Mississauga Life Early Spring 2015

Port Credit Comedy Festival

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