Every year thousands of people start a business. With more people stuck in dead-end jobs and working for sub-standard pay, it always seems like the next logical step. They strike out with dreams of becoming financially independent, being paid what they’re worth, or being able to work their own hours. The sad news, according to numerous government and independent resources, the odds are stacked against these budding entrepreneurs. In reality, the odds are stacked in favor of failure as most new business start-ups fail in three years, and many more fail before their second year. What are the problems new entrepreneurs face that cause such catastrophic results?
Biggest Reason for Business Failures – Failure to
Plan.
The biggest problem seems to be a lack of planning. New business owners fail to complete business or marketing
plans. They get so fed up with present jobs, or lifestyles, they jump into self-employment ventures. They fail in investigating local competition or the potential customer market and start business ventures destined for failure. They open shops and go out of business before their second year. Had they taken some time to research, they may have found the local market was too saturated or local business was already struggling to stay operational. They may have found certain barriers to entering their market that would prevent them from finding business success. However, they failed to do that research, and many didn’t formulate business or marketing plans. They lacked a road map taking them to their goals, and combined with the other reasons mentioned, is why they failed. Without clear plans identifying individual steps to success, how can you become successful? Sadly, most all business failures failed to create road maps.
A business plan is critical if you want government funding or a bank loan, but it’s just as critical if you don’t need them. The business plan is a report on research into your chosen business field. By completing it, you find out about your local market, competition, and potential customers, if your industry is growing or declining, and a host of other information needed to formulate plans for business success. While the business plan tells if it is wise to open your business, a marketing plan reminds you how to make sales. The marketing plan lists step-by-step instructions to increase business sales. One step may build on another, while some steps are implemented together, but regardless of how these steps work together, it is important to think about it BEFORE opening your business doors. Without a clear, step-by-step plan to show where you are, where you want to be, and how you get there, the chances of realizing your dreams will be slim to nil. How can you sell products or services if you don’t know what kind of people buy them? That is just another thing business and marketing plans help you discover. Without the information, these plans help you find, you will likely fail in your new business. If you haven’t written these plans, then I’d suggest taking the time to start them now. They will help ensure business success.
Marketing – I Need to Know ALL About It Before I Begin.
Another problem stems from ineffective marketing efforts. People spend time looking for marketing materials and ways to self-educate about it while failing to take action doing something to try to improve their exposure. If I can impart one marketing secret to you, that secret is this: marketing is somewhat a trial and error process. It involves making modifications and doing testing to gauge what is most effective for your market and products or services. Keep in mind marketing works differently for different people too. But in the end, marketing is building trust, integrity, and reputation with potential customers and getting products or services out into the consumer’s mind. Tracking efforts is important. Without tracking, you will never know what works and what doesn’t work. Be sure to keep marketing effort lists. Include the marketing medium, company, ad copy, dates, and times it ran, and add a tracking code to each one to track the sales made from them. Let’s say you run an ad on XPOBAZAAR here to gain increased sales. When running the ad, include a promotional code or an extension at the end of a phone number to know where the sales are coming from. When someone calls or emails an order, make sure you collect the information from the promotional code or ask them for the phone extension they are calling. Add up the data and it tells you exactly what ads are paying off and which ads might need to be reworked. To determine what is working and what isn’t, take the cost of the ad divided by the number of sales and see which one is lower. A lower cost per sale is more effective and better. Depending on your marketing budget, place numerous different ads at once and test your ads quicker to see what brings the best returns for your marketing efforts. Don’t sit there and do nothing while trying to learn everything you can about ad creation and marketing techniques. Write up a few ads and start testing them. The sooner you begin testing the sooner you learn what will work for your market. Without sales, you have no business. Without effective marketing, you have no sales and therefore will have no business. Don’t let indecision sink your dreams.
Customer Composition & Continuing Education Process – Keeping Educated on Market & Consumer Trends.
Another area where most businesses fail is failure to continue learning about potential customers. Even if you develop good marketing materials, do all the planning, and continue to increase visitor volume, failure to track their demographics and trends can eventually lead to missed trends changing visitor makeup, and these trends could make offerings outdated. If that happens, you will watch your sales begin to drop off and any affiliate programs you promote could start to suffer. Keep an eye on website logs and track visitor clicks, or even better; find ways of gathering visitor data through polls and questionnaires on your website. Ask them direct questions and watch the feedback. This information is invaluable when tailoring your ads or deciding what affiliate program products and services to promote. Find some free offers on the internet and offer links to them to any visitors taking time to fill out your polls or questionnaires. Just ensure the freebies are valuable to your visitors and you will increase your chances of gaining direct response information from them. Take for example a scenario where you want to offer another product or service, but that product or service will take some extensive time to implement and produce. Placing polls about the product or service features and asking visitors direct questions about their need or lack of need for it, it could help you avoid wasting time and resources on products or services that aren’t going to sell. That’s just one example of how powerful information is when it comes to your business’s success. Use common sense, ask questions, and keep your ears and mind open. Through direct response polls and questionnaires, you will ensure future business success.
The Know it all Complex – Refusing to Accept Change.
Another time when businesses fail is when owners think they know everything there is to know about it. Let me tell you something, time is never ending and always changing. Time marches on, and those choosing not to march with it get left behind. That is what happens when you think you know it all. Time marches on leaving your business behind, and it fails. No matter if you’re in business for 25 years or are just starting out, there is ALWAYS something to learn from it. Whether it’s learning your visitors’ demographics better, learning which ads draw more attention, or learning new and creative ways to market your business, no matter how much you THINK you know, there is ALWAYS more to learn. Not only does time march on, but people change, and so does the consumer market. Failure to track these changes through online information-gathering processes or paid services will surely cause your business to falter and possibly fail. Running a business is a constant learning process. Learn to continue your adult education and you help ensure your future business stability and success.
Biting off More than you can Handle – Knowing When to Say When.
The last reason I will mention in this article is business owners who try to do too much. You can’t be everything to everybody. You have to pick an area that maximizes your talents and downplays your weaknesses. Today, more commonly referred to as niche marketing, is where you learn to fine-tune your marketing target to increase business success and sales. Running a business requires us to wear many hats. There’s the accounting that needs to be done, marketing that always needs improvement and submission to effective advertising mediums, customer service, website design and promotion, writing content, and the list goes on forever. One-man operations require an almost exhausting amount of time and commitment to get the work that needs to be done. If you don’t quickly learn your strengths and weaknesses, you soon become so overwhelmed when adding more tasks that you could suffer from shutting down. Shutting down won’t accomplish anything, and your business could very easily fail. Be careful of this, as burnout is quite prevalent among business owners. By knowing your strengths and carefully evaluating projects before you implement them, you will know when you can still do it yourself, or if you need to think
about hiring some help.
There’s a lot of money to be made in self-employment, but only by taking steps to ensure your business’s future.
Educate yourself as much as possible while not being stuck on knowing every detail before you act. It’s better to do something than sit and do nothing while your business begins to falter and fail. But by taking the proper precautions, you could save yourself from falter and possible failures before they happen. The best bet to running a successful business is doing the research, writing the plans, creating a credible list of information resources for future questions, tracking your visitor demographics identifying your customers in as much detail as possible. Through planning for possible problems, you have the answers to fix the problems as they come up while avoiding potential business failure. Remember, failing to plan means planning to fail. Put in the time and research ensuring you know as much as you can about your business and its operations. Know how much it costs to generate a sale and know whom those sales will come from. Find out how much it takes to run a business in your market and the kind of profit you can enjoy. Knowing all this information will help ensure you have proper mishap prevention plans in place ensuring your business’s future success.
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