Lessons from Failure: Why Small Businesses Close Their Doors
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Disclaimer: All articles and all information in this newsletter are provided for general informational purposes only, and do not constitute financial, tax, legal, accounting, or other professional advice, and may not be relied on for any purpose. You should always consult your own tax, legal, and accounting advisors before engaging in any transaction. In addition, the articles and information in the newsletter do not necessarily reflect or describe either the actual commercial financing products that Biz2Credit offers or their specific terms and conditions. Detailed information about Biz2Credit commercial financing products is available only on our product pages. We invite you to learn more about our commercial financing products.?
Welcome to the Small Biz Scoop!???
Every small business starts with a vision, but not all survive the challenges of entrepreneurship. While failure is often seen as an endpoint, it’s also one of the greatest teachers for business owners. Understanding why some businesses close their doors can provide valuable insights to help others avoid common pitfalls and build resilience. ?
In this edition, we’re exploring the key reasons small businesses struggle, the lessons to be learned, and how to turn setbacks into stepping stones for future success.?
? BONUS - Check out the findings and insights of the latest Biz2Credit Small Business Earnings Report - February Edition.
7 Common Financing Mistakes Businesses Make
Another form of debt for small business owners is credit card debt. Even the best business credit cards carry some risk, and businesses can find themselves swimming in credit card debt fast. That’s why you need to know these four strategies to overcome business credit card debt.??
1. Neglecting a Sustainable Budgeting Practice?
Many small business owners neglect this practice and go on to spend more than they produce. A budgeting practice doesn’t allow you to just have an emergency fund should your business need it, but having different types of budgets (marketing, shipments, suppliers, bills, etc.) — will be a big step forward in your business’s financial health.?
2. Not Separating Their Business Finances?
Mixing business and personal finances is a common first mistake for new businesses — and one of the biggest missteps you should avoid on your own business.?
3. Spending Too Much Too Soon?
Every business needs smart investments to be profitable and thrive. But one of the biggest mistakes new business owners make is to start buying all the equipment, supplies, vehicles,?real estate, etc., too fast, which will put your business’s finances in a hole.?
Click here to read all 7 financial mistakes that most businesses make?and the best practices to take for you to avoid them.??
12 Essential Leadership & Management Skills for Every SMB
Small and medium-sized businesses (SMBs) are a huge part of our nation’s economy, contributing to job creation, innovation, and overall growth. But not everyone has what it takes to run a successful SMB—and if you don’t, your business may not succeed.?
In this article, we’ll break down the essential leadership and management skills that every SMB owner and manager should possess or develop to steer their businesses toward long-term success. ?
1. Strategic Thinking ?
The first step to being a successful leader is having a clear vision for your company and a well-defined strategy and business plan for achieving it.
Your vision provides direction and purpose for your team, while your strategy and business plan guide daily decision-making. ?
2. Communication Skills ?
Strategic thinking is useless without strong communication skills. You need to be able to effectively communicate your vision and strategy to your team, otherwise, they still won’t be on the same page. ?
Show them that their opinions matter and affect overall business operations. This back-and-forth communication fosters trust and collaboration within your team and customer base so that you can better understand and respond to their needs. ?
3. Decision-Making ?
Strong decision-making skills involve gathering relevant data, analyzing potential outcomes, and making informed choices. Effective leaders are decisive but willing to adapt and learn from their decisions, whether they succeed or fail.?
Keep reading to learn more about key skills for successful business leadership and management, and how to master conflict resolution to foster a productive work environment. ??
How to Avoid Business Bankruptcy with Financing
As a business owner, the thought of going bankrupt can fill you with fear especially when the economy is struggling, or your company is facing hard times. If assessing your finances leaves you concerned about your business’s future, there are some steps you can take internally before reaching out to a bankruptcy attorney or getting a second job:?
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There are several financing options to avoid business bankruptcy, including credit counseling and debt consolidation or restructuring.
If your business is making too many monthly payments to lenders,?refinancing?with a new lender might be a great option to lower your monthly liabilities and improve your creditworthiness.
Consider the following financing options to increase capital and avoid bankruptcy:?
Continue reading about these financing opportunities and prepare your business for rainy days.?
?? Research Report:?
Biz2Credit Releases the Small Business Earnings Report – February Edition?
Biz2Credit has released its monthly Small Business Earnings Report for February 2025. The report examines the financial performance of U.S. businesses that applied for credit from Biz2Credit.?
The study looks at insights like:?
?? Average earnings for January 2025?
?? How small businesses compare to last year?
?? Expanses trends and the Inflation?
Here is what we found:
Small businesses continue to be pressured by rising costs, leading to lower earnings. Revenue is up 29% year-over-year, but expenses have pushed earnings down. Compared to January 2024, earnings are down nearly 58%.
Impacted by rising costs, those surveyed showed a three-year low in earnings to start the new year, despite increased revenue.
However, sunnier days on the horizon. Our data indicates small businesses see higher earnings during warmer months.
?? View the full report: (click here)
Additional Links and Resources?
Continue building your financial knowledge and support your business’s success with our additional resources designed specifically for small business owners:?
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