4 Reasons Small Businesses Fail - And How You Can Succeed
- Aug 5, 2020
- 5 min read
Updated: Mar 6, 2024
Written by: Amber Barry, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Starting a small business is not for the faint of heart, it’s for go-getters! So if you’ve taken the leap into business ownership kudos to you on your passion, courage and drive.
Setting yourself up for success from the start is crucial if you want to have staying power, especially when you consider that 22.5% of new businesses fail within the first year, about 50% make it to year five, and only about a third reach the 10-year mark. Building a strong foundation can help.
Here are 4 common reasons new businesses fold and how to make sure you’re not one of them:
1. THERE’S NO NEED IN THE MARKET
According to CBInsights, the 1 reason that most businesses fail is that there’s no need for what they’re providing. This is fascinating to me, because the need is actually based on audience perception. This means that how well you package and leverage your offerings matters. A lot. Did we really NEED the iPhone? Probably not. Did we survive just fine without Pumpkin Spice Lattes? Yup. Were we functioning in life before Amazon? I mean, we were getting by, right?
Sometimes genius lies in creating a need in the marketplace, and other times it’s just a matter of listening to what your audience wants and packaging your offer in a way that meets that need. Which leads right into the second reason.
2. THEY DON’T GET TO KNOW THEIR AUDIENCE
Getting to know your audience is a key element to building a long-lasting, successful business. When you know who you’re speaking to and what their pain points are, you can tailor your products, services and marketing to meet their needs. This way you’re providing the exact solution people are searching for, and purchasing becomes a no-brainer.
If you aren’t in tune with your audience and their needs just yet, it’s ok! It’s an ongoing process that you can fine-tune along the way. An easy way to start is to join a few different Facebook-groups where you think your target market is hanging out. You can ask questions if you’d like, but the most important thing to do is LISTEN. There are over 1.4 billion users in Facebook groups, and they share their likes, wants, needs, struggles and hurdles all the time. Your job is to listen and identify the common themes, and then either create the solution they’re looking for or tailor your marketing for your existing products or services so that you’re speaking directly to their needs
3. THEY DON’T ESTABLISH A CONSISTENT ONLINE PRESENCE
There are some basics you need here. Namely, a business account on at least one social media platform and an engaging website.
A strong social media presence can help you stand out in the crowd, but you don’t have to be active on every social media platform. Find out where your audience is hanging out and start there. Daily posts and engagement may feel daunting, but it’s a great way to build relationships and show people that things are alive and happening in your business!
When you’re creating engaging content, play to your strengths. If you like to write, include a blog on your website or write for a magazine. If you’re better on camera, record videos or go live on social media. If you could talk all day, start a podcast. There are so many options to explore, which is amazing, but can also feel overwhelming.
To keep it simple, choose one new idea to focus on at a time, and stick with it consistently for a period of time to test it out. Each new thing you test is a learning experience. What works for some businesses may not work for others, so determine your starting point and keep track of your analytics and revenue to see how well each new tactic helps your business grow.
4. THEY DON’T CREATE A STRATEGIC DIGITAL PLAN
Unfortunately, it's not as simple as "if you build it, they will come." I know you're totally sold on and completely stoked about what you're selling. Still, now it's your job to create that excitement for everyone else! Knowing your audience's needs, packaging up your offers to fill those needs, creating an online presence to generate buzz, and consistently extending your reach and visibility are just a few things to consider. Pulling all of these elements together is an art that can help you increase your visibility and maximize your marketing efforts.
Think about it like this: You’re helping someone get from point A (first meeting you) to point B (becoming your customer). It’s your job to give them directions. To do this, you can design a clear digital path for them to walk down with certain milestones along the way. The goal here is to craft a journey that’s intuitive and inviting and provides the best possible experience for your customers.
These milestones are:
The Introduction
Clearly introduce yourself and what you’re offering.
The Connection
Establish a way to keep in touch with the people interested in what you have to offer and nurture those relationships, so your new fans get to like, know and trust you and your brand.
The Education & Value
Deliver value and provide education so that people look to you (or your products and services) as the solution.
The Benefits
What are the benefits of doing business with you? What sets you apart from the competition? Give your new fans a reason to purchase from you.
The Purchase
The path leading up to this point should make this step a no-brainer. The goal here is to clearly deliver your offer and make it easy to follow through with the purchase.
Commit yourself to making daily progress in these areas, however small it seems. Small steps don’t always feel like much in the moment, but when done consistently, they quickly add up to massive momentum. Happy go-getting!
P.S. If you’re looking for accountability, inspiration or growth ideas, come on over and join us in The Go-Getters Club!
Amber Barry, Executive Contributor Brainz Magazine
Amber Barry is a U.S. based business strategist and consultant specializing in digital marketing, automations and social media advertising for small businesses and startups. She is passionate about deconstructing the process of establishing and growing a business, and aims to make it less overwhelming and easier to navigate for new business owners. She is the founder of Amber Barry | Digital, a digital marketing and advertising agency, and creator of The Go-Getters Club, where she offers online courses and coaching to women in business to help them maximize their marketing efforts and turn their small steps into big wins and massive momentum.She is a Registered Nurse and a Certified Health Coach by training, and draws from her 12+ years of experience in health and wellness and 20+ years as an endurance athlete to help people transform their journey as business owners into an enjoyable, successful, fulfilling experience.
