Why Do So Many New Small Businesses Fail?
For the past 13 ½ years The BLÜ Group – Advertising and Marketing has been helping small and medium sized businesses in various industries throughout the country grow their business. During this time we have learned a lot about how they operate, what makes them successful, and strategies to help them grow. We have also learned that failing businesses all seem to have one thing in common…they wait too long to hire a professional advertising agency or they don’t hire one at all.
I know what you’re thinking, “Tony, of course you think businesses wait too long to hire a company like yours”, but before you chalk this up to just another self-serving post, please take a moment to review the scenario below and tell me it doesn’t remind you of a lot of new businesses you have seen in and around your city.
- A hobby is well received by a lot of people so an individual decides to turn their hobby into a real business.
- Unfortunately this appears to happen without a lot, if any, research or planning.
- The business opens with what the owner considers to be enormous success.
- This is usually due to them being the new kid on the block, doing something a little different than their competitors, and support from friends, family, and the local community.
- This also usually happens without a lot of advertising, but rather spreads due to word of mouth…a business owner’s best friend, right?!
- After the honeymoon period ends, usually about 6-9 months, but sometimes sooner, sales start to decline and there isn’t as much traffic as there was before.
- It could be another 3-6 months or longer before the business recognizes the need to change something.
- Word of mouth no longer seems to be as powerful as it was during the honeymoon.
- Now begins the search for a company or person that can help them stop the bleeding.
You’ve seen this before, right? So if they want to hire someone to help them turn things around, what are their options at this point?
- Work with a one person outfit, most likely a graphic designer or website designer, to save money.
- On the surface this may sound like a good idea, but there is no way one person can know all the different strategies and tactics necessary to help grow a small business. Quality design and a content-rich, consumer-focused, optimized website are necessary, but it’s usually only a small piece of the puzzle.
- Work with local media companies (TV, Radio, Billboard, Newspaper) because they don’t know any better or they have been knocking on their door since the day they opened.
- Each of these outfits are good in their own way, but they are really only interested in selling their own products and services. I have yet to meet a radio person that recommends doing billboard even though that may be what’s best for the client.
- Hire a professional ad agency to help them strengthen their brand, develop marketing plans, create the work, and do whatever it takes to help them grow their business.
Regardless of which option a business chooses based on their budget and available resources, it may be too late. At this point the business may be hemorrhaging money so they need / expect incredible results for their investment and sadly, there usually is not an overnight cure for a sick business. This is just setting the new person / company up for failure.
It would have been so much easier if the business owner would have reached out to the professionals before even coming up with a name. Unfortunately we know it typically does not work this way so here’s a quick reminder…plan your work and work your plan! And reach out to the professionals to help you get started with that plan. Even just taking the time to consult with an ad agency up-front will be well worth it.
Please pass this along to your friends and family if they are thinking about starting a business. They will thank you for it later.
Do you have any other tips to help new businesses succeed? Share them with us here.