Why Most Small Businesses Fail ?
More than 50% of small businesses fail within their first year and around 95% within the first five years. Have you wondered why ?
I have looked for the answer to this question based on my experience while trying different business models. I have identified three principles to follow if you want to build a successful Online Business.
1. Sell Your Product Before Creating It
Have you created a product you considered amazing until you realised to be the only one interested in buying it ?
Most small businesses fail because they invest money and time on product creation before carrying out market research.
Before creating a product answer the following questions:
- Is there a similar product on the market ?
- Who are your competitors ?
- What is the USP (Unique Selling Point) of your product ?
- What are the needs of your future customers ? (ASK THEM! DON’T MAKE ASSUMPTIONS)
- How many people are interested in your product ?
You can discover the needs of your customers reading forums, Amazon product reviews or creating online surveys. You will get valuable information that will tell you in which direction to move to create your product.
To understand if there is a demand for the product you have in mind you can create a simple landing page where people can register their interest.
If you don’t want to create your own product you have the option to leverage someone else’s product. This is done via Affiliate Programs and the advantage in this case is that you can immediately promote products that are already successful.
This allows you to focus on marketing instead of dealing with product research, creation and refinement.
2. Learn How To Market Your Product
A great product that people like is not the only component required for a successful business. You could have the best product in your niche but if no one knows it your business will never take off.
Small businesses fail also due to lack of marketing strategy; coming from an IT background this is something I didn’t understand until I started learning how to market products online.
If you are new to online marketing the amount of info available can be overwhelming. To start you will need to:
- Have a basic understanding of how a landing page works.
- Learn about concepts like PPC (Pay Per Click), PPV (Pay Per View), CTR (Click Through Rate).
- Read about traffic generation methods.
- Discover how link tracking and split testing are important to optimise your marketing.
- Understand what an autoresponder is and how you can leverage it to systemise your business.
The ones above are just some skills you will need to master and this won’t happen overnight, this is a long term game that will give you results if you persist.
I have found important having someone who could help me in my learning process based on his past online marketing experience. A mentor who knows the most common errors and helps you avoid them. We all know how challenging is to focus on goals consistently so someone to hold yourself accountable will have a huge impact on your results (I would be honoured to be that person for you).
3. Focus On Small Steps At The Time
There is a learning curve in building your marketing knowledge and this can be daunting due to the amount of information available. Rationalise your learning process and understand the concepts you need to know before starting posting ads.
Read advertisement policies for Google, Facebook and Youtube. More publishers are starting advertising online and rules are stricter for them. If you don’t have enough knowledge this can result in your ads being disapproved or your account being disabled.
Ask yourself the following questions:
- How do I comply with advertisement policies ? (you might think your landing page fits all the criteria until your ads get disapproved)
- How are other marketers advertising online ?
- How does their landing page look like ? (advertisement platforms want to see relevant content to provide good experience to their customers)
Always be genuine and explain your customers what they would get in exchange of their email address
Coming back to your learning process make sure you have a system to follow; many small businesses fail due to lack of systems to leverage and repeatable steps to follow.
The system that has introduced me to Online Marketing is made of 21 steps that explain you:
- Business models that work
- Concepts you need to know to get started with Online Marketing
- How to convert your leads into customers
- What makes most money for online businesses
- How to leverage business partners to increase productivity
During the 21 steps a coach is assigned to you. His role is to guide you making sure you learn every day consistently.
Have you ever started something you never completed ? We are all guilty of that and that’s why a mentor is important.