PEOs Can Help Cure the Business-Killers of the Past
Survival statistics for small businesses in the United States are famously grim. They’re not quite as bad as the popular notions that 80% fail in the first year and just 5% make it to the five-year mark. Reality is a bit more kind, with Small Business Administration data showing us that 80% make it to their first birthday, half cross the five-year threshold, and just a third mature to a decade.
Those actual numbers are better than what the average man on the street might believe, but they’re still pretty grim.
Libraries full of books have been written about all the reasons small business fail: accounting issues, poor leadership, failure to adapt to changing market conditions, misreading or mishandling the customer relationship… and they’re all valid. The decades-old wisdom entrepreneurs and analysts have passed down to us remains valid today and it’ll matter as much tomorrow.
But in some respects the business-killers of the past aren’t necessarily a terminal diagnosis in 2017. Critical issues that would be guaranteed to sink a small business two generations ago can be mitigated, overcome, or even used to a business’s advantage -- provided that business has the flexibility and support that comes from a partnership with a professional employer organization.
It’s Easier Than Ever to Pivot
If your grandfather wanted to open a hardware store on Main Street, he’d have made a deal for the building, sunk a tremendous amount of money into inventory, and worked hard to grow a loyal customer base. If he’d realized one section of the store just wasn’t paying off or that he needed to pick up a new revenue stream, dealing with that would’ve been a time-intensive chore. By the time he sorted it out, would it have been too late? And how much would pursuing the wrong strategy have cost?
Now, that hardware store can identify problems or successes and pivot on a dime to respond. Maybe nearly-instant data exposes a problem sooner rather than later and you stop the bleeding quickly. Maybe you identify a surprise win hiding in your data and start a YouTube channel that promotes it from Main Street to a global audience. Either way, it’s easier to make business-saving adjustments in 2017 -- but only if you’re not bogged down with basic operations like payroll and HR.
It’s never been easier to make changes, but you do need the time to identify a new course of action and implement it.
Customers And Talent Are Everywhere
Entrepreneurs started to realize that they were immersed in a fully-national, and now global, economy when the fantastic stories of garage-based tech businesses came to light through the 1980’s. All of a sudden you didn’t need to depend only on the customers in your town to determine whether you’d sink or swim. Access to customers and clients everywhere became real -- and so did that same access to the talent to help you pull it off.
No one in your town is a dependable, reasonably-priced graphic designer who’s also a certified Google Partner? Not enough clients in your zip code, but plenty of good leads a tank of gas away? Well, someone somewhere matches up, and moving forward with bringing that employee on board or pitching great clients in another state just might save your business.
But to take advantage of that increasingly global marketplace for goods, services, and people, you need to devote time and resources to the development that connects you with them. It’s possible to spend your time identifying new opportunities or finding that one person who can move a key initiative forward before you lose the chance, but not if you’re stuck grinding out paperwork on every aspect of employee benefits.
Risks Are There For The Taking
One of the most critical parts of surviving a rapidly-evolving business climate in 2017 is being able to take appropriate risks and opportunities when they present themselves. There’s a reason so many successful businesspeople advocate relatively lean operations; the more sleek and fast-moving your business can be, the quicker you can seize the opportunities that keep you afloat and position you for growth.
In the past, lean wasn’t an easy concept to pull off. You had to do most everything yourself, and you had to make sure it was done right.
But now we know that the more bloated your responsibilities -- which can include all the functions a PEO covers, from workers’ compensation to training and development -- the tougher it is to grab new business or make a swift change that puts you a step ahead of the competition. It’s simply harder to be fast and accurate with all those things weighing you down. Years ago you would’ve had to carry those burdens yourself. Now you don’t.
Statistics on small business survival are still daunting, and no entrepreneur should don rose-colored glasses. All the important stuff from before still matters. But we’re in a different era now replete with glimmers of hope. Just as advances in medicine keep us from succumbing from conditions that plagued past generations, we’re better now at diagnosing and treating common business diseases -- if you have the right attitude, make the right decisions, and have support from the right partner.