By Noam Pollack
(Noam Pollack has been looking into the reasons for business success and business failure and is a resident of Scarsdale.)
In 2024, two small businesses that my family and I visited often in my hometown of Scarsdale, Current Home and Via Forno, closed. This isn’t something that is unusual. In fact, many other small businesses have faced a similar fate.
These business closures made me start to wonder why so many small businesses fail. What are successful business owners doing differently that enables their success?
For many people, small business ownership is the pathway to the American Dream. “It is a pathway to economic independence, to income generation, to wealth generation,” said Jane Vernon, a former mayor of Scarsdale and currently the CEO of The Acceleration Project (TAP), a nonprofit dedicated to providing advice to small business owners. However, many people who attempt to start a business of their own ultimately fail, losing all hope for their big dream.
According to the U.S. Bureau of Labor Statistics, about 24.2% of U.S. businesses fail after one year, about 48.5% after five years, and about 65.1% fail after ten years of operation. The problems that lead to failure often are related to poor customer service, a lack of digital marketing, and making small financial mistakes.
To help understand what sets survivors apart, I spoke with three successful business owners based in Scarsdale: Ken Giddon from Rothmans; Michael Rosen from the Eye Gallery; and Mike Wilson from Wilson & Son. Rothmans is a men’s clothing store; Eye Gallery provides vision care and eyewear; and Wilson & Son Jewelers has been in operation since 1905.
The most common theme I noticed when interviewing these three business owners was how strongly they emphasized the importance of customer service. Customers are the foundation for a successful business. For this reason, “people first, product and sales second…single most important thing,” said Wilson.
Each business owner stressed that when a customer walks through the door, they have to be the number one priority. A customer should never walk into a store without someone saying hello. They should always feel welcomed. By getting to know customers better, businesses will be better able to understand their needs and provide them with the best products and services. This is vital for a business to grow and become successful since, as Giddon said, “If you treat your customers right, they’re going to come back.”
Great customer service goes beyond just what happens in the storefront. The three business owners stressed the importance of community involvement. This can include sponsoring events, supporting local causes, and donating to charity. This allows businesses to connect with customers and build positive feelings that will make them more likely to want to shop there. By building a relationship with customers both inside and outside the store, these businesses have created a good experience that will make customers more likely to support their business.
In order to showcase a business’s customer service, it first needs to attract customers. This is possible through effective marketing, yet so many businesses are falling short with their efforts. In fact, according to the U.S. Bureau of Labor Statistics, 22% of failed businesses didn’t implement the correct marketing strategy. Businesses need to recognize that we are living in a period of fast-growing technology, which can be seen in the use of marketing through social media. Social media is a great way to make people aware of a small business, its mission, and its products.
According to the University of Maine, about 60% of the global population uses social media, with 410,000 new social media users each day. For this reason, it’s crucial for businesses to use social media platforms such as Instagram, TikTok, and Facebook to maximize the amount of sales for their business. Social media marketing is something that the three business owners that I interviewed currently use, and they have seen significant success with it.
Wilson, for one, uses Search Engine Optimization (SEO), a process that is supposed to improve a website’s presence in search engine results. The idea is for Wilson & Son to be the first jewelry store to come up when someone does an online search for “best jewelry store near me” or something similar.
Even with the best efforts at creating good customer relationships, many small businesses often make small, avoidable mistakes that quickly add up and can have significant effects on their businesses’ long-term potential.
Vernon explained that many business owners “don’t necessarily have the background in the fundamentals of making sure a business is generating revenue and that you’re operating with good margins and making good profit,” which is a big part of why small businesses fail. Without a basic understanding of how to manage finances, owners may overspend, have poor margins, mismanage inventory, or take on too many fixed costs.
Rosen expressed his concern, saying the most common mistakes he sees small businesses make are “biting off more than they can chew and spending too much money that they can’t recoup.”
These types of mistakes, often because of a lack of business knowledge and experience, can have costly consequences. This is where Vernon and TAP might help. TAP’s mission is to help small businesses grow and succeed by giving them support in strategy, finance, operations, and marketing. In creating TAP, Vernon “saw the gap between these incredibly industrious, determined individuals and the access to knowledge.”
Many small businesses have a limited budget, which typically does not allow an owner to hire a dedicated team to help with finances, employee management, and marketing. Through hands-on consulting, TAP may help to fill these gaps. As noted by Vernon, a business owner has to be willing to recognize the challenges and have the appetite to fix them.
Giddon advised, “You have to be able to know you’re going to get knocked down, and you just gotta have the fortitude to get back up.”
