If you believe that your small business is underperforming your peers, then chances are you actually are doing great.
According to new data released by Kabbage, Inc., the vast majority of small businesses have healthy revenue performance. In fact, 74% of small businesses met or exceeded the overall index revenue growth of small businesses over three months period. However, 60% of small businesses ranked their revenue growth below the 50th percentile of similarly sized small businesses.
Kabbage data indicate that small businesses are growing, though they may show a lack of confidence sometimes. So, my friend, you might just need appropriate resources to better analyze and compare your cash-flow performance against your peers.
Reality Vs Self-doubt
The path to small business success is never easy. As a small business owner, you have to overcome multiple challenges your business face. And in doing so, you might sometimes believe that you’re not generating as much revenue as your peers are doing.
However, it is often unwarranted self-doubt that you feel about your financial health. In reality, you are most likely to do well.
Kabbage Small Business Revenue Index, which pulls around 2 million live data connections from more than 200,000 small businesses to prepare the ongoing revenue performance report, states that most small businesses are doing fine despite the fact that they show the lack of confidence.
The majority of small businesses (74% of them) met or exceeded overall index revenue growth of small businesses, reports Kabbage.
Small Businesses Are Growing
There is a popular misconception that business owners are often overconfident. But the findings of Kabbage data indicate the opposite.
Kabbage Chief Revenue Officer, Laura Goldberg, said in a prepared statement, “However, this study shows the potential for small business owners to err on the side of under-placing their performance when comparing themselves to others,”
“The likely reason for this is that people tend to rate themselves below average on difficult tasks. Simply put, people assume they’re worse than others when a task is hard. Both running a small business and benchmarking performance without solid data are difficult tasks, and respondents showed underconfidence despite sharing similar struggles,” she added.
It is imperative that small business owners need solid data to compare their growth with peers as the wrong picture of business growth can result in underconfidence. And underconfidence sometimes causes small business owners to quit, even though they are already doing great.
Laura Goldberg said, “People who demonstrate underconfidence are more likely to opt-out of or choose to exit a competition when, in fact, they would have succeeded had they persisted. Providing them access to benchmarking systems and analysis on par with what’s available to large and public companies may reduce anxiety and help them calibrate strategic business decisions,”
“There is no question that technology advancements will empower small businesses with smarter systems to better analyze and understand their business performance. What’s most exciting is the potential for technology to fuel greater confidence in entrepreneurs and their businesses and to provide the encouragement to keep growing,” She continued.
Comparing Your Business Journey with Others
It takes a lot to make a small business successful. And each small business owner goes through different kinds of struggles.
Some hurdles can hinder your growth, while other business owners can easily overcome those hurdles. So comparing your progress with other small business owners is not a realistic measuring stick. What’s more, comparing is a quick way to feed into self-limiting beliefs.
Yes, you can check any reliable small business growth index to get the real picture of how well you are doing. But the objective should be to figure out the areas of improvement.
Remember, your primary goal is to grow your business and challenge yourself.
About the Report
Kabbage surveyed more than 600 U.S. small business owners to drive its conclusion. Click here to learn more about the latest 2020 small business revenue growth numbers.
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Great article Sandeep, I think we also compare ourselves to the larger business in our sector and always feel that we should be doing more with our more limited resources
Thanks, Paul!. Indeed, small businesses have to do more with their limited resources.
How is the growth right at this moment?