Did you know only half of the businesses that start will make it five years?
And only one-third of those that make it five years make it to 10 years.
Today we're talking all about why businesses fail, and how you can make sure that this doesn't happen to you. You can watch the video here or read below.
One of the top reasons businesses fail is they have a complete lack of a unique selling proposition.
What is a unique selling proposition? It is what sets you apart from the competitors. How do you run your business in such a unique way that you're different from the competitors, or how are your products different? You want to be thinking about this because this is one of the most important things for you to do to make your competition irrelevant. If you don't have a unique selling proposition, then you're just a me-too and part of the pack. You want to be figuring that out so that you can separate yourself from the competition. I did a webinar on this, Blueprint To Building A Product Brand That Lasts. You can watch it FREE right here.
The second reason businesses fail is the failure to communicate their unique selling proposition.
You've figured out what your unique selling proposition is, but then you fail to communicate it to the customers. It's so important that you communicate what it is you do, and the way you do it that's different.
Listen to your customers, and use their words. I like to keep a running list if I come across something that my customers would be talking about. It's could be a keyword, or it's something that I should remember in my marketing materials, I'll write that down. Let me give you a perfect example. I'm a coach and a consultant for product-based business owners. I was using the word, "Product-based business owners," in all of my marketing.
Then I started realizing a lot of the people that would benefit from my products and services were not calling themselves product-based business owners. They're calling themselves online shop owners, creative entrepreneurs, makers, designers, and the list goes on just to give you an example. I've started making a list, and when I hear something and go, "Ah, that's how I should be communicating with my customers in their words," I write it down. Some of the places that you can find your customers, in Facebook groups, or at events, things like that. Think about where your customers hang out, and then what are they saying? Another great place to find their words and what they're saying is social media. Make sure that you're communicating your unique selling proposition in the voice that they would be looking for.
The third reason businesses fail is not listening to the customers and offering products or services that they are willing to pay for.
This sounds so easy, but so many people miss it. As business owners we fall in love with our products and we just assume everyone's going to love them like we do. We should test the market and make sure that the customers are willing to pay for what it is that we are selling. Find a way to communicate with the customers. Use focus groups, use surveys, email marketing, go to meetings, anywhere where you can get in front of the customer to find out what it is they want. The best advice for your products and services comes directly from the customer because hopefully, you're solving a pain point for them.
The fourth reason businesses fail is they do not have a clear business model with revenue streams.
This is VERY important.... revenue streams. You have to nail the market where your product fits in so that you can make money, or you're sunk. You run out of cash. Running out of cash is one of the top reasons businesses fail. Decide, what is your business model? Are you an eCommerce shop, are you a wholesale shop, are you a retail shop, are you a subscription based business? Whatever it is you are, decide that, focus on that, and make sure that your products or services are wanted or needed in that space so you have revenue.
The fifth reason businesses fail, they run out of cash.
Businesses run out of cash when they haven't done the things that we've been talking about here. If you don't have cash, you can't pay your bills, and then you are out of business.
Make sure that you can make money from the products or services that you sell. Your business has to generate revenue or it won't succeed.
The sixth reason businesses fail is poor management, and lack of skills to managing your business.
You're the founder, you have to gain the skills, and you have to gain the knowledge to navigate the issues in your business. You have to spend time on personal development, you need to read to succeed.
I like to say, "Turn your car into Drive Time University." I don't listen to the radio in my car, I listen to books, or I listen to podcasts. I try to always listen to something where I can learn something new to help my business grow. That's one of the things that you'll find all successful people do, they continually read and learn. Make sure that you are always developing your leadership skills so that you can grow your business.
We've talked about a lot of ways that you can avoid your business being one of the statistics where your business fails. I have lots of information for you over in ProductBizMadeEasy.com. I have mini bite-sized lessons to help you grow your business.
I also do FREE weekly webinars to help you learn all about sales, marketing, strategy, and systems. You can find them here, register for my next one today.