Commentary by Jon Quick
It is a fact that the majority of new businesses will fail within the first 18 months.
Let me reference a Forbes article from a couple of years back where business startup expert Eric T. Wagner lists five main reasons that businesses fail, and my thoughts on why he is right about all of these.
1. Not really in touch with customers
Interpretation: They think they know it all.
Before you put it out there, find out if there’s a real need. Ask people. Then, once you start the business, continue the dialogue.
Be there. Greet them. Remember their names. Provide exceptional customer service. Without it, you will eventually fail. The word quickly gets around.
2. No real differentiation
A $4 cup of coffee at Starbucks vs $.99 at a gas station. It’s the experience you are paying for. Give them an experience. It’s the ol’ unique selling proposition (USP) from Marketing 101. What is it about your business that is uniquely different?
3. Failure to produce compelling advertising.
Invest in some marketing to get your new business off the ground. It doesn’t have to cost a ton. I have a friend who has developed a worldwide following just by properly using social media.
Express your message creatively so your advertising stands out among all the rest.
The late Pat Fallon, creator of the now legendary agency Fallon Worldwide, once said: “Outsmart. Not Outspend.”
Create that great experience. People will start talking about you. Get down to the grass roots. Build your clientele one customer at a time. There’s a reason politicians shake hands, kiss babies and attend hundreds of chicken dinners.
4. Leadership breakdown at the top
Never distance yourself from the staff or your customers. Harland Sanders visited every one of his KFC Restaurants regularly. The Colonel was known to cut a manager down to size if the mashed potatoes weren’t exactly right. Set the example.
Lack of a profitable business model
“Have people sample your ‘secret sauce’ before putting it on the market,” Wagner wrote. Sample your product or service on enough people. You’ll soon get a good feel for what they think. Is there really enough of a reason for this business to work and be profitable? Have a sound business plan. Be sure you also have legal issues covered. A bad experience could sink you forever.
Remember: All these mistakes can be easily avoided if you remember what your parents told you. Do your homework. Invest. Hire great people to help. That way you can have a successful business doing what you do best. And you’ll keep the Colonel pleased.
Jon Quick is President of the Carmel-based marketing and public relations firm, Q Public Relations & Marketing. You can reach him at [email protected]. He is a former 25+ year manager at both CBS and Emmis Communications
