Almost two-thirds of owners says their businesses are in worse financial shape this year than in 2008, according to a new survey of 1,000 people by management consultant George S. May International.
In fact, 45% of those owners say their businesses are unprofitable.
Take our survey and then find out what others said:
Although 60% of respondents to the May International survey cited the economy as the number one reason they are not profitable or as profitable as they could be, May says the main reason is waste.
“Many business owners feel that the recession is to blame for all of their woes, but that’s simply not the case and is actually part of a bigger problem,” said Paul Rauseo, May International managing director. “There are plenty of small businesses making money in this economy because they are taking care of the business side of the business — controlling costs and increasing productivity.”
Here are the top reasons business owners gave for their companies’ poor financial performance (click on image for larger view):
Source: George S. May Intl.
“This survey speaks volumes to what we see with our troubled clients everyday,” Rauseo said. “These numbers should be flipped for a business to be successful. The economy and competition are convenient excuses and should not be the
Paul Rauseo
main reasons for a company’s success or failure; the management of the business and overall company efficiencies are the more powerful determining factors on whether or not your business will succeed or fail.”
Rauseo said it is alarming that 60% of those surveyed said they are satisfied with their accountant’s help in making their business profitable, even though a majority of them are not profitable.
“We hear many business owners say they just don’t have enough sales or there is a lack of advertising,” Rauseo said. “But really, they don’t have the business intelligence to tell them where their wastes are.”
Click here for more survey results.
Other business stories…
- Do you have O.C.’s ugliest bathroom?
- O.C. company buys its 10th business
- O.C. businessman to lead global entrepreneurs group
- O.C. minority-owned firms nominated for excellence
- Entrepreneur seeks to keep pollution out of storm drains
- Calif. first-time jobless claims drop nearly 3,000
- O.C. missing from Fortune’s fastest-growing firms list
- Foreclosure backlog grows in O.C.
- No new manufacturing jobs anytime soon in O.C.
- Catholic group helps members find jobs
- Worst mistakes in business writing
- Group seeks women owners of million-dollar businesses
- Web site helps small businesses deter fraud
- Union Bank focuses online attention on women, minorities
- How to get referrals
Or maybe that business is a “bag store” or sells candles, o simply has a product that was desired when people had lots of disposable income, but now is not a choice for those with limited incomes. I’m waiting for some of those chrome wheel stores to start dropping.
I read your comment and hear this ever so often. Downturns are a reoccuring fact of life in every industry. I can tell you that making shoelaces is not so profitable but having those same webbing machines produce straps for many differnt busineses is. There is always a way to “skin” the cat. WE are only limited by our own thinking.
Many small businesses dont market and advertise, they hope that they can stay afloat during tough times through referrals and relationships built over many years. Its amazing sometimes how complacent some owners are regarding their companies, thinking that by not changing anything they will miraculously pull through.
In times of economic duress, many competitors are exiting the field. If anything, now is the time to be making investments into building brand recognition with existing customers and expanding outwards to pull in new business. Marketing doesnt always show big results in the beginning, which is why many pull the plug, but consistently getting your name out to the market you serve will have a cumulative effect that nets more customers in the long run. Since most companies are throttling back, now is the perfect time to put your company into the conversation.
The other thing that kills smaller companies is that they will keep bad customers just because they think they need the work. Even undercutting their prices just to bring in the work. While I understand that some people feel like they need to stay busy, sometimes customers cost more to service than you make from their business. Its time to look long and hard at their behaviors and weed out the customers that cost companies money and start to identify and target the customers best suited for their business.