3 Reasons Businesses Fail and How to Fix Two of Them

The U.S. Small Business Administration has seen lots of small businesses come and, unfortunately, go. According to the SBA, over 50% of small businesses fail in the first five years. Why? What goes wrong?

After a thorough review and much field research it was found that the failing businesses all had three things in common:

  1. Poor financial planning;
  2. Poor marketing; and,
  3. Poor selling skills.

And for most businesses marketing is indispensable, vital. If you don’t market the odds are your business will fail.

This Indispensable Marketing post will address two (marketing and selling) of these three reasons for business failure. So let’s take a look at them.

Learn More: My Take on the Difference Between Sales and Marketing

Marketing

“Marketing is everything. – Patrick McFadden”

Let me start by saying that marketing and advertising are not the same thing. They used to be, but they’re not the same thing anymore. Everything is marketing – the name of your business, products and services, how you comport yourself, determining whether you will be selling a product or service, how you run your business, the method of manufacture or servicing, how you bid on projects, the colors, size, and shape or your product, how you perform for clients and customers, the packaging, how you build relationships, the location of your business, the advertising, the PR, etc. You’re either judged on these things, or you’re being ignored.

Marketing is successful if it moves your product or service at a profit.  It’s a pretty big percentage of your success, much bigger than what most business owners think. Unfortunately, most entrepreneurs, business owners and leaders still think that if they can put together a wow ad they’ve got their marketing pretty much down. Not so. Advertising is only two percent of your marketing. Of course, it’s a very important, and fairly expensive, “two percent,” but it’s a small fraction of the other critical marketing tools and techniques.

Learn More: Plan on creating wow experiences, not wow ads.

By the way, many of the marketing tools and techniques will cost you nothing but time, energy and creativity. With the others, we’ll show you how to save loads of cash by being smart. For example, when choosing advertising as a marketing tool don’t ever be tricked by the myth of the ad rate card. Remember successful marketing moves your product or service at a profit, so never ever pay rate card rates. Advertising rates are negotiated – talked over. Now aren’t you glad you read this post?

Learn More: The Top 5 Marketing Myths and The Truth Behind Them

Sales and Selling

Ultimately we are all paid because we are selling something.

“Sales” and “selling” are another indispensable part of your marketing. Again two percent of it. Selling refers to the face-to-face or telephone communication between you and/or your staff with prospects and customers. Sales or selling is not saying, “Hi, can I help you?” and, following the sale, “Have a nice day,” like so many small business owners think.

Selling in its purest form is simply communicating emotion and sharing enthusiasm.  If you see a great movie and tell 20 friends – you are selling.  If you go to a wonderful restaurant and then spread the word – you are selling.  We all get paid for sharing our enthusiasm.

What you need is to find something you are so passionate about that you want everyone else around you to experience the same benefits you are enjoying.

Unconventional marketing tactics will glitter the bottom lines of your small business. It’s less expensive and demonstrably more effective. It’s learning a bit more, it’s getting the edge , the x-factor. In today’s market, it’s winning by a photo finish. Nevertheless, Winning!

About the Author: Patrick McFadden is a marketing consultant/coach for small businesses and midsize organizations. He’s also an American Express OpenForum Advisor. He develops marketing plans and strategies for getting and keeping profitable clients using low-cost but effective marketing methods.

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