Analyst says recovery hinges on small businessesSmall businesses are considered the backbone of the American economy and with national leaders saying the economic revival begins with small firms, a well-executed business strategy has never been more important.
Too many modern day entrepreneurs fearful of what future may hold
This is according to Richard B. Sanford, an entrepreneur and business coach who has launched 11 successful smaller companies himself.
In past recessions, independent smaller businesses helped fuel economic recoveries, Sanford said. But tightened credit, government regulatory impediments and a lack of federal support for community banks -- the principal source of capital and financial support for small business -- has many modern day entrepreneurs fearful of what the future may hold.
Proper planning and a well-executed business strategy, though, can clear the way for a smaller enterprise to expand and take reasonable risks that will lead to an improved bottom line, and which usually requires an increase in its work force, Sanford said.
Most people are not aware that the American small business success rate of 20% is, and has been, unchanged, decade after decade, according to the U.S. Small Business Administration. The challenge facing American entrepreneurs is to increase this success rate.
Sanford, also author of a strategy guide for smaller businesses called Success By Design, believes that the heart and soul of any small business is its strategic plan, and a formal strategic plan increases an entrepreneur's odds for success.
"The plan is the framework and foundation that outlines how to think, how to plan and how to take action to succeed," Sanford said. "The American small business sector creates more than 70% of all new jobs annually. Small business is the job-creating engine that expands employment and creates the majority of all new jobs in our country."
Sanford believes that every small business failure is a direct result of insufficient planning, but it doesn't have to be that way. His strategy tips for small businesses and entrepreneurs include:
* You must have a strategy. An entrepreneur's dreams for a successful business venture require strategic planning to turn them into reality. If you don't have a strategic plan, create one before you make another mission-critical decision.
* You become what you think about all day long. If you can visualize success, chances are you'll achieve it. If all you do is fret about failure, it can become the self-fulfilling prophecy. Think success and encourage your team to do the same.
* There may be situations out of the control of the owner, but customer service isn't one of them. Every business controls how it serves its customers. The ones who can't get a handle on that simple fact will fail, plain and simple.
"The irony of small business is that, as a business sector, it should be considered 'too big to fail,'" Sanford added. "The problem is that small business does not have the luxury of a government bailout. It needs to heal itself from the inside, using only available resources and the wits in their leaders' heads. With all things being equal in the marketplace, no matter the economic conditions, strategic planning makes the difference between success and failure every time."