Home Business Magazine Online
By Travis Crabtree, President, Swyft Filings
According to the Small Business Administration, only half of all new businesses survive for the first five years, and only one-third of new businesses make it past the 10-year mark. Small businesses fail because they make kick-yourself-in-the-head, clear and definable mistakes. If thinking about starting a home-based business, here are five of the most commonly simple mistakes that can ruin a new business, and how to avoid them.
Mistake #1: Opening a Business in a Market with No Demand
Sounds obvious, but before moving forward with a business concept, research your target market, demographics, and if possible, customer interests and needs. What are the existing businesses in the area? What types of businesses are missing? Are there enough potential customers to build a sturdy base of patrons? Then develop a plan to strategically fill that existing gap, as the potential for success exponentially increases when targeting a market ripe with demand for your products and services.
Mistake #2: Not Standing Out from the Crowd
Ok, you landed on a business concept where demand in your market is increasing for those products and services. You may have also found out, if there is lots of demand, chances are there are many competitors, too. Without any real differentiators or competitive edge to point to, you still might see sales plateau or plummet.
Instead, rise above the noisy and crowded business landscape by identifying your unique value proposition, then marketing to those strengths. Can you articulate what sets your business apart from competitors? Is the way you operate unique? Do you sell a higher quality service? Do you offer price/performance advantages?
Also, research similar businesses in your area and figure out where they may be falling short. What are customers saying in negative reviews? This may be painful, but absolutely find out if there are things your competitors are doing better than you, and then figure out how to catch up or leapfrog them.
If you cannot answer the questions above easily or with a good outcome, revisit your approach, service, or your products. You want to position your in-demand business idea to gain traction and market share against the competition, not lose it.
Mistake #3: Weak or No Online Presence
Indeed, approximately 81% of consumers research options online before deciding where to make a purchase. Incredibly, despite the importance of having an online presence for driving brand awareness (and sales), more than one-third of small businesses still do not have a website! Without a website, it is difficult for new customers to find you. In addition to being easier to find you, the most important thing is to use your digital space to convey all the wonderful things that make your business stand out in a crowd, as outlined in step #2.
A focused online marketing strategy can drive inclusion of your business in Google searches, traffic to your site, and clicks on your content when customers land on the site. Do you have a Search Engine Optimization plan to drive better search rankings?
For example, if opening a new sustainable clothing storefront, target high search volume keywords like “ethical clothing companies,” and use these terms in your website copy and whenever possible, when you post for the business on social media. Alternatively, find a term that you can rank high in, such as “sustainable clothing” that may still be available and underused by other marketers.
Concurrently, create profiles of your business on social media sites like Facebook and Instagram to connect and interact with customers, show off your wares and highlight sales and promotions.
Fortunately there is a plethora of online marketing tools for small businesses, both paid and free to help get you started. Or find a local online marketing consultant (who did the steps outlined above, and you found him/her!) who will be glad to affordably help you create an online presence that should pay for itself very quickly with increased traffic and leads to your site.
Mistake #4: Out of Touch with Customers
The Internet shifted control of the vendor-customer narrative toward the customer. Convenience, speed, and a high-quality brand experience are what most customers seek. If patrons are not getting what they expect, there is a good chance they will take their complaints online for others to read.
Amazingly, many businesses neglect customer feedback on social media channels like Yelp, Angi, and MerchantCircle. Eighty five percent of consumers say they trust online reviews as much as personal recommendations. If not closely monitoring, you are missing straight-from-the-customers advice on how your business can meet their expectations! Without leveraging that free data, you will become further and further removed from what your customers truly need, and you will see dwindling repeat business.
It is imperative you dive into any of those recent third-party site reviews, as well as any other negative comments on your own social media channels.
If these channels are not giving you the insight you need, consider sending out a customer satisfaction survey after someone visits your store. Knowing when and why a customer had an unpleasant experience helps you actively work on making things better. This ensures not only more repeat business but that you are genuinely delivering an experience that today’s customers want.
Mistake #5: Reinventing the Wheel
There are thousands of entrepreneurs who have already been in your shoes. Why do it alone and waste time for no reason? Instead, take advantage of the online resources aimed at small businesses that can help you optimize and grow your business. Consider joining your local chamber of commerce and/or small business networking groups to grow contacts and learn the best practices from those who have been there and done it. To that, LinkedIn has many excellent small business groups you can also access.
The post Five Kick-Yourself-in-the Head Reasons Why Small Businesses Fail, and How to Avoid Them appeared first on Home Business Magazine.