Every year ... of people start a ... With more people stuck in dead end jobs and working for ... pay, it always seems like the next logical step. They strike out with dreams of be
Every year thousands of people start a business. With more
people stuck in dead end jobs and working for sub-standard
pay,
it always seems like the next logical step. They strike
out with dreams of becoming financially independent, being
paid what they’re worth, or being able to work their own
hours. The sad news, according to numerous government and
independent resources, the odds are stacked against these
budding entrepreneurs. In reality, the odds are stacked in
favor of failure as most new business start-ups fail in
three years, and many more fail before their second year.
What are the problems new entrepreneurs face that cause such
catastrophic results?
Biggest Reason for Business Failures – Failure to
Plan.
The biggest problem seems to be lack of planning. New
business owners fail to complete business or marketing
plans. They get so fed up with present jobs, or life styles,
they jump into self-employment ventures. They fail
investigating local competition or the potential customer
market and start business ventures destined for failure.
They open shops and go out of business before their second
year. Had they taken some time in research, they may have
found the local market was too saturated or local business
was already struggling to stay operational. They may have
found certain barriers to entering their market that would
prevent them finding business success. However, they failed
to do that research, and many didn’t formulate business or
marketing plans. They lacked a road map taking them to their
goals, and combined with the other reasons mentioned, is why
they failed. Without clear plans identifying individual
steps to success, how can you become successful? Sadly, most
all business failures failed to create road maps.
A business plan is critical if you want government funding
or a bank loan, but it’s just as critical if you don’t need
them. The business plan is a report on research into your
chosen business field. By completing it, you find out about
your local market, competition and potential customers, if
your industry is growing or declining, and a host of other
information needed to formulate plans for business success.
While the business plan tells if it is a wise to open your
business, a marketing plan reminds you how to make sales.
The marketing plan lists step-by-step instructions to
increase business sales. One step may build on another,
while some steps are implemented together, but regardless
how these steps work together, it is important to think
about it BEFORE opening your business doors. Without a
clear, step-by-step plan to show where you are, where you
want to be, and how you get there, then chances of realizing
your dreams will be slim to nil. How can you sell products
or services if you don’t know what kind of people buy them?
That is just another thing business and marketing plans help
you discover. Without the information, these plans help you
find, you will likely fail in your new business. You can
find some valuable information for writing business and
marketing plans through the Kaufman Foundation’s
Entreworld.org at http://www.entreworld.org/Channel/SYB.cfm.
If you haven’t written these plans, then I’d suggest taking
time to start them now. They will help ensure business
success.
Lure of FREE Internet – I should get Information & Tools
for FREE?
With more people flocking to the internet to start a new
business, many try accomplishing their self-employment
dreams with little financial resources. The internet has
become a place where people rely on finding information
freely and for no financial investment. In the beginning, it
may have started out that way, and free information was
abundant, but as more businesses flocked to the net, finding
free information is becoming increasingly difficult. Most
people depend on search engines to find information, but the
businesses learned to exploit search engine vulnerabilities
to gain visitors and most times you will only find paid
solutions for your information needs. Somewhere, the
information IS available freely, but it is going to take
time to find it, and sometimes it takes a LARGE amount of
time to find it. The question becomes how quickly you want
to start your business, and how much time you can spend
searching for information? If you want to start quickly,
then you need to realize the need to make some financial
investments in your information needs. Just be sure to
research the company before buying their information. It
ensures their information is timely and useful. If paid
information is not an option, be prepared to spend some time
researching the information. There are various government
resources for information searches. A good place to start is
FedStats located at http://www.fedstats.gov/ . They have a
toolkit including DataFerrett. DataFerrett is a government
database-search tool to find different market and
demographical information compiled from census information
and other government agencies.
Marketing – I Need to Know ALL About it Before I
Begin.
Another problem stems from ineffective marketing efforts.
People spend time looking for marketing materials and ways
to self educate about it while failing to take action doing
something to try improving their exposure. If I can impart
one marketing secret to you, that secret is this: marketing
is somewhat a trial and error process. It involves making
modifications and doing testing to gauge what is most
effective for your market and products or services. Keep in
mind marketing works differently for different people too.
But in the end, marketing is building trust, integrity, and
reputation with potential customers and getting products or
services out into the consumer’s mind. Tracking efforts is
important. Without tracking, you will never know what works
and what doesn’t work. Be sure to keep marketing effort
lists. Include the marketing medium, company, an ad copy,
dates and times it ran, and add a tracking code to each one
to track the sales made from them. Lets say you run an ad in
your local newspaper to gain increased sales. When running
the ad, include promotional code or an extension at the end
of a phone number to know where the sales are coming from.
When someone calls or mails an order, make sure you collect
the information from the promotional code, or ask them the
phone extension they are calling. Add up the data and it
tells you exactly what ads are paying off and which ads
might need reworked. To determine what is working and what
isn’t, take the cost of the ad divided by the number of
sales and see which one is lower. Lower cost per sale is
more effective and better. Depending on your marketing
budget, place numerous different ads at once and test your
ads quicker to see what brings the best returns for your
marketing efforts. Don’t sit there and do nothing while
trying to learn everything you can about ad creation and
marketing techniques. Write up a few ads and start testing
them. The sooner you begin testing the sooner you learn what
will work for your market. Without sales, you have no
business. Without effective marketing, you have no sales,
and therefore will have no business. Don’t let indecision
sink your dreams.
From Brick & Mortar to Online Business Ventures – Doing
it Successfully.
The next problem seems to be businesses making the jump to
the online arena. Once again, small mom and pop type shops
starting on the net with limited budgets take to free
hosting services to get a web site online while attempting
to increase market share. When done appropriately, this idea
can help boost sales, but done incorrectly, it only helps
eat away at profit margins and helps ensure failure. When
doing business on the internet, nothing beats having your
own custom domain. You won’t get that from most free hosting
services, and worse, many free hosting services place ads
throughout your pages to help recoup costs of free services
they provide you. In the business expenses grand scheme,
domain name registration is inexpensive. Many hosting
services are also inexpensive. For as little as $10.00 and
$20.00 per month, you can have a registered domain, and paid
hosting, which allows more flexibility than free hosting
services. When I speak of more flexibility, I talk about
ability to run automated scripts and possibly sell ad space
to other businesses. That’s a critical requirement for
membership sites and any business owner wanting automation
scripts to make business marketing easier.
Customer Composition & Continuing Education Process –
Keeping Educated on Market & Consumer Trends.
Another area where most businesses fail is failure to
continue learning about potential customers. Even if you
develop good marketing materials, do all the planning, and
continue to increase visitor volume, failure to track their
demographics and trends can eventually lead to missed trends
changing visitor make up, and these trends could make
offerings outdated. If that happens, you will watch your
sales begin to drop off and any affiliate programs you
promote could start to suffer. Keep an eye on web site logs
and track visitor clicks, or even better; find ways of
gathering visitor data through polls and questionnaires on
your web site. Ask them direct questions and watch the
feedback. This information is invaluable when tailoring your
ads or deciding what affiliate program products and services
to promote. Find some free offers on the internet and offer
links to them to any visitors taking time filling out your
polls or questionnaires. Just ensure the freebies are
valuable to your visitors and you will increase chances of
gaining direct response information from them. Take for
example a scenario where you want to offer another product
or service, but that product or service will take some
extensive time to implement and produce. By placing polls
about the product or service features and asking visitors
direct questions about their need or lack of need for it, it
could help you avoid wasting time and resources on products
or services that aren’t going to sell. That’s just one
example of how powerful information is when it comes to your
business success. Use common sense, ask questions, and keep
your ears and mind open. Through direct response polls and
questionnaires, you will ensure future business success.
The Know it all Complex – Refusing to Accept
Change.
Another time where businesses fail are when owners think
they know everything there is to know about it. Let me tell
you something, time is never ending and always changing.
Time marches on, and those choosing not to march with it get
left behind. That is what happens when you think you know it
all. Time marches on leaving your business behind, and it
fails. No matter if you’re in business for 25 years or are
just starting out, there is ALWAYS something to learn from
it. Whether it’s learning your visitors’ demographics
better, learning which ads draw more attention, or learning
new and creative ways to market your business, no matter how
much you THINK you know, there is ALWAYS more to learn. Not
only does time march on, but people change, and so does the
consumer market. Failure to track these changes through
online information gathering processes or paid services will
surely cause your business to falter and possibly fail.
Running a business is a constant learning process. Lean to
continue your adult education and you help ensure your
future business stability and success.
Biting off More than you can Handle – Knowing When to
say When.
The last reason I will mention in this article is business
owners who try doing too much. You can’t be everything to
everybody. You have to pick an area that maximizes your
talents and downplays your weaknesses. Today, more commonly
referred to as niche marketing, is where you learn to
fine-tune your marketing target to increase business success
and sales. Running a business requires us to wear many hats.
There’s the accounting that needs to be done, marketing that
always needs improvement and submission to effective
advertising mediums, customer service, web site design and
promotion, writing content, and the list goes on forever.
One-man operations require an almost exhausting amount of
time and commitment to get work done that needs done. If you
don’t quickly learn your strengths and weaknesses, you soon
become so overwhelmed when adding more tasks that you could
suffer from shut down. Shutting down won’t accomplish
anything, and your business could very easily fail. Be
careful of this, as burnout is quite prevalent amongst
business owners. By knowing your strengths and carefully
evaluating projects before you implement them, you will know
when you can still do it yourself, or if you need to think
about hiring some help.
There’s a lot of money to be made in self-employment, but
only by taking steps to ensure your business’ future.
Educate yourself as much as possible while not being stuck
on knowing every detail before you act. It’s better to do
something than sit and do nothing while your business begins
to falter and fail. But by taking the proper precautions,
you could save yourself from falter and possible failures
before they happen. The best bet to running a successful
business is doing the research, write the plans, create a
credible list of information resources for future questions,
and track your visitor demographics identifying your
customers in as much detail as possible. Through planning
for possible problems, you have the answers to fix the
problems as they come up while avoiding potential business
failure. Remember, failing to plan means planning to fail.
Put in the time and research ensuring you know as much as
you can about your business and its operations. Know how
much it costs to generate a sale and know whom those sales
will come from. Find out how much it takes to run a business
in your market and the kind of profit you can enjoy. Knowing
all this information will help ensure you have proper mishap
prevention plans in place ensuring your business future
success. Until next article, happy business operations and
my wishes for your greater business success and growth in
2005.
