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Why most small businesses fail and what to do about it?

Steve Mills

Steve Mills calls himself “The Prudent Marketer” and has been helping small businesses to grow for over 20 years.  Steve runs a small business himself, and says  he has probably made most of the mistakes that you may be making!

 

A full 80% of businesses in the UK fail within five years and 99.9% of businesses do not reach their full potential.  Why is that?

The truth is that there are many reasons: being unlucky, not focussing, the economy, changes in the market, etc.  However, some of the big reasons that I see businesses fail is what I call lack of expertise.

What do I mean?

If you think about your business, then the big three areas of expertise are:

  • Operations
  • Marketing
  • Finance

Very rarely have I heard of a business going bust because they are bad at what they do.  Rather, it is because they are bad at selling what they do (sales and marketing), or bad at managing the money (the financial side of the business).

You are an expert.  You almost certainly have expertise in what you do, be it landscape gardening, architecture, hair dressing, software development or IT.

However, what is your level of expertise in reading a balance sheet, writing a business plan, producing an exit strategy?  If you are not happy with your answers, then hiring a top class accountant like Kirkpatrick & Hopes is not a “should”, it is a “must”!

What about Sales and Marketing?  What is your level of expertise in search engine optimisation, re-targeting, PPC advertising, conversion rate optimisation, email marketing, YouTube, social media and other digital marketing methods?

The simple fact is that marketing is changing and keeping yourself up-to-date is almost a full time job.  The 5 BIG C questions business owners need to ask are:

Crowd Development = how can we grow the size of our database?

I am talking about the number of people on your email list, your contacts on LinkedIn, Facebook and Twitter.  The number of people watching your YouTube videos and the number of people visiting your website.  In essence, the number of people who know you, like you and trust you.

Conversion = how to convert your crowd into people who know you, like you and trust you

This is the nurturing stage which is often missed out by small businesses. This is what I call the “courting stage”.  You would not meet someone and go up to them and say “marry me”.  But business owners go up to prospects and say “buy this”.  Instead of building the relationship and positioning their company as the expert “go to” company in their niche.

Conversion rate maximisation = getting more sales from your clients, prospects and loyal fans

In this section you need to consider how you can turn those “nurtured prospects” into sales by becoming better at converting interest into action.

Cash  = the process of converting “going for a coffee” into that first date or first sale

It is no use getting thousands of people to visit your website and maybe download a free report (or read a blog) unless you convert that interest into a sale.  So you need to be outstandingly good at converting leads into sales.  You need to examine your sales systems, structures, follow-ups, words and referral systems etc.

Continuity = keeping customers and getting them to buy from you again and again

One of the big marketing opportunities is the opportunity to maximise your current clients by getting them to buy from you on an ongoing basis.  In other words, getting people signed up to a monthly service, or to become a member, or getting some form of monthly ongoing fee.

If you need more information or help then feel free to contact me.

I would like to thank Kirkpatrick & Hopes for featuring my blog post and for their support over many years.

Steve Mills – The Prudent Marketing Company

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