You might have heard this oft-quoted stat: 50% of all small businesses fail within the first 5 years. Among the 50% that tank, more than a third crash and burn in less than two years. And only about a third manage to stick for 10 years or more.
Why do so Many Small Businesses go Kaput so Quickly?
Four main reasons (listed in no particular order):
Under-capitalization — Ownership doesn’t have enough cash to get the business off the ground and keep the lights on until it becomes profitable.
Poor Management — To put it bluntly, ownership doesn’t know what they’re doing. Could be a lack business acumen. Could be misjudging the market. Could be sheer stupidity.
Lack of planning — Launching a new business is an exciting prospect! But it takes far more than a “great idea!” enthusiasm and good intentions to launch a new business and sustain it over the long (or even short) haul.
Ineffective marketing — This is often due to the combination of the factors outlined above… Not enough money to fund marketing campaigns, little to no understanding of how marketing works, and a lack of any coherent marketing strategy.
But here’s a Hot Tip, friends…
Established Small Business Fail Due to Ineffective Marketing, Too
Heaps of small businesses that have been in the game for decades and longer have seen their fortunes evaporate and doors shuttered for good.
Again, a range of factors can contribute to such a demise… Sometimes, it’s due to inexperienced new ownership or management making poor decisions.
But failure to identify and adapt to changing trends, and being caught off guard by economic downturns are also common culprits.
And while there’s no cure (other than ouster) for inept management, the other factors that commonly lead to small businesses going belly can all be overcome with…you guessed it — Effective Marketing!
“How so?” you’re wondering incredulously (you don’t have to be psychic to pick up that thread).
A fair question deserving of considered answer…
Adapting to Changing Trends
Do you have a Marketing Mindset? In other words, as a part of consistently marketing your business, do you keep an eye on the marketplace, noting shifting market conditions, changing consumer behavior, and changes in how your competitors are doing business?
If you answered yes, yes, and yes — You have a Marketing Mindset, and you’ll never be caught off guard by changing trends.
Because you know how your industry and marketplace are changing, how that impacts your clients, and what your competitors are doing to adjust. And you’re adapting to meet these changes, remaining competitive and client-centric in conducting your business.
Because if you’re not, well… Here’s a prime example of a once mighty industry that fell victim to changing trends.
Remember when digital music downloads first became a thing? And rather than embrace this burgeoning technology and looking to adapt, record companies fought the inevitable changes tooth and nail, refusing to consider any option other than continuing to sell music in the physical media format.
Two decades later, album sales are a literal fraction of their previous heights. Only a very few select artists reach the Platinum million sales mark. And the revenue earned, workforce size, and power wielded by record companies have dropped off a towering cliff.
Why Adaptability in Business + Marketing Matters Now More Than Ever
What does all of this mean in today’s world? As we approach a new year, one thing is certain: Nothing is certain. And in uncertain times, adaptability is KEY.
The small businesses, whether solopreneurs or 50-employee operations, poised to emerge relatively unscathed from the murky waters are those looking toward the horizon and readying for the inevitable changes ahead.
So, here’s a question: How will you market your business, serve your customers, and remain competitive amid a swiftly changing landscape?
If you’re struggling to answer these questions, we should talk ASAP!
Call or email: 310.466.7893 | ryan@ryananys.com