At least 50 percent of businesses worldwide fail in their first five years of existence. Check government statistics if you don’t believe me
The gurus most obvious reason for death is the unfortunate ones just ran out of cash. This deliberation is not very useful and so I decided to seek out people directly and indirectly connected with failed businesses to see if I could uncover the details, establish any consistent reasons for failure and post them on the web in the hope that my insights would help others avoid a similar fate. I found eight common reasons for business death. Here are three of them:
No Vision, mission or strategy
“If you have not decided where you are headed 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 need a strategy. Strategy can be likened to a route map it shows you how to get to your destination. It’s a systematic series of activities. 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 monitoring business perfomance is the sales forecast.
Lack of a system for marketing or sales
Marketing is about seeking out markets and trying out strategies to position your proposition in the minds of prospects and directing them into your sales channel. Sales is about engaging the prospect and getting them to buy your product or service. Marketing is a process of measuring and refinement of the methods you employ to attract prospects. selling is the process of creating leads, forecasting sales and closing business. In effectively managed organisations a decent marketing and sales system is usually underpinned by a well designed sales forecasting software system. The tools in these systems help you to track and measure the activity in the sales and marketing processes. Outcomes arederived from reports produced by the system which can then be used to compare what was planned with what actually happened. In summary what gets measured gets improved or discontinued. This is the critical formula for success.
Lack a system to monetise their current customer base
There is a common rule that 80 percent of your sales should come from twenty percent of your customers. Your job is to achieve or surpass this figure. Customers who have already made purchases from you are simpler and cheaper to persuade to buy from you than prospects that have not. A combination of good web based crm software and sales forecasting software should give you the insight of recent activity and enable you to find opportunities in your current customer base.