More than 50% of businesses don’t survive more than 5 years. Check government statistics if you don’t believe me
The authorities state the reason for expiration is the failures simply ran out of money. This description is not helpful and so I decided to track down those directly and indirectly connected with failed businesses to see if I could uncover the details, establish any common reasons for failure and post them on the web in the hope that my results would help others avoid a similar fate. I uncovered eight consistent reasons for business death. Here are three of them:
No Vision, mission or strategy
“If you have not decided where you are going then how are you going to get there?” You must have a clear picture of what you want to achieve and how things will be for your business if you achieve it. To achieve anything you it is essential to have a strategy. Strategy is like a road map it tells you how to get to your destination. It’s a structured list of actions. To make a strategy work you have to create a business plan that not only contains the key actions and milestones but can used to measure business performance against. A key instrument for tracking and measuring business perfomance is the sales forecast.
Lack of a system for marketing or sales
Marketing is about exploring markets and trying out strategies to position your proposition in the minds of prospects and pulling them into your sales funnel. Sales is about engaging the prospect and getting them to buy your product or service. Marketing is a process of measuring and improvement of the ways you employ to acquire prospects. selling is the process of acquiring leads, forecasting sales and closing sales. In effectively managed organisations a good marketing and sales system is usually supported by a well designed sales forecasting software system. Systems like these enable you to track and measure the actions and results in the sales and marketing processes. Results arederived from reports generated by the software which can then be used to compare planned vs actual results. The point I am making is what gets measured gets improved or discontinued. This is the essential formula for success.
Lack a system to monetise their current customer base
There is a well used rule that eighty percent of your sales should come from 20% of your customers. Your task is to achieve or surpass this figure. Customers that have already bought from you are simpler and more cost effective to reach than prospects that have not. A combination of good web based crm software and sales forecasting software should give you the information of past activity and enable you to search for opportunities in your existing customer lists.
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