A look at three small businesses that failed in 2010 is informative for credit unions.
Although there are signs that the economy is recovering, no one will forget the toll of the past few years. The recession was particularly vicious for small businesses, and The New York Times recently looked at six small companies that went under in 2010.
The article examined the nature of each business and the reasons for its demise. Borrowing the piece’s format, let’s look at three of the six and see what credit unions can take from the mistakes.
- The personal finance website was doing well until Mint.com came along and stole its thunder. It went under in July 2010.
- What credit unions can learn: Adapt to competition quickly. For example, if you roll out a successful marketing campaign, other businesses might attempt to copy it. Be prepared to one-up them.
- This parenting social network shut down in January 2010 because it spread itself too thin.
- What credit unions can learn: Never forget what earned your credit union success. Focus on the fundamentals and keep the unnecessary frills to a minimum.
Large Format Digital
- The signage company folded in March 2010 after a poorly timed expansion plan. The company was growing right when the recession mushroomed.
- What credit unions can learn: First, always gather as much information as possible before making a large-scale decision. Second, accept that there are elements of business that are out of your control until they happen. Try to imagine extremes and plan accordingly.
To avoid mistakes, it's best to understand them. These three businesses (plus the other three in the NYT article) can shine a light on pitfalls in credit unions' paths.