FutureVisionsSM
creating sustainable
results in growth and performance
"There is a substantial
correlation between the profitability of a small business enterprise and
the overall profitability of the industry or sector in which the business
operates." What does this really mean?
Actually, it goes to the heart of why
some small businesses generate large profits while others are marginal at
best. Yes, there are many reasons but one of the most significant relates
to a very basic decision that is overlooked by those who operate
unproductive enterprises. Many self-employed business owners simply choose
the wrong type of business, one they are not suited to own and manage or
one that by definition will not produce substantial profits.
Some business categories
- entire industry sectors, in fact - are inherently more profitable than
others. Even business owners with much affection for their offerings,
great energy, and very high intellect can and do fail to generate profits
because they made a very bad decision before they even opened their
enterprises. They never studied the variations in profits generated by
various types of businesses.
So it might not matter
that you have the desire and the ability. When the tide is going against
you, it is much more difficult to reach your destination. On the other
hand, those with less drive and fewer skills often succeed big-time
because they are not sailing against the tide.
In particular, women are more likely
than men to be attracted to the business of retailing products. This is a
major reason why so many marginally profitable or unprofitable businesses
are owned by women. About 7 in 10 of the 2.3 small business retailers
(those that are sole proprietorships) in the US are women, for example.
Yet, among the population of all small businesses, the retail trade has
the lowest ratio in terms of profits versus per cent of total receipts:
0.29.
Click here for a survey of the
profitability of various types of businesses (excluding the professions).
For the free top tips for small service-businesses, send an email to
lb@FutureVisions.org with
"free MWS top tips for small service-businesses" in the subject and nothing in
the body of the email.
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