27.04.2012 14:44

If you think it’s hard being a small business owner in today’s business climate, you’re not the only one.

Credit reporting agency, Dun and Bradstreet have reported a 48% rise in the number of business closures during 2011 from the previous year, while the number of startups dropped dramatically, by 95%.

According to Dun and Bradstreet failure numbers have been growing by 30% per year in the last three years and, since 2008, have been exceeding the number of new businesses starting up.

Most alarmingly, failure rates have been rising fastest n the small business sector. Failures in small businesses with fewer than five employees are reported as rising by 57% over the year, while those with between six and nineteen employees experienced a 40% increase for the same period.

Most failed businesses blame rising interest rates, wages and wage-related costs and the strong Australian dollar as well as the general uncertainty in the economy that has resulted from the Global Financial Crisis and the escalating European economic situation.

So how do you avoid becoming another statistic?

One way that businesses can survive and thrive in this current environment is to keep a regular eye on the Key Performance Indicators (KPIs) for their business. Determining KPIs for a business is not always easy but, once set, it is quick and easy for any business owner to monitor them. A slight change in these KPIs can be an indicator that things are starting to slide and enables the business owner to take care of the situation before a serious problem arises. In most cases, prompt attention to a potential problem will significantly increase your chances of fixing it before the costs start piling up.

Contact Morgan Reynolds to find out how Key Performance Indicators can help keep your business on track and earning you higher profits.