More than 50% of businesses don’t survive more than 5 years. Visit government census or Depart of Industry web sites and if you look at the detail you will see irrefutable evidence
The statisticians “broad brush” reason for death is the failures basically ran out of money. This deliberation is useless and so I decided to find people directly and indirectly connected with failed businesses to see if I could determine the details, establish any consistent reasons for failure and publish them on the internet in the hope that my findings would help others avoid a similar fate. I found eight common reasons for business failure. Here are three of them:
No Vision, mission or strategy
“If you don’t know where you are headed then how are you going to get there?” You have to have a clear picture of what you want to achieve and how the environment will be for your business if you achieve it. To achieve anything you must have a strategy. Strategy can be likened to a road map it tells you how to get to your destination. It’s a structured plan 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 testing strategies to position your proposition in the minds of prospects and drawing 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 ways you employ to reach prospects. Sales is the process of getting leads, forecasting sales and closing business. In effectively managed organisations a good marketing and sales system is consistently supported by a effective sales forecasting software system. Systems like these enable you to track and measure the activity in the sales and marketing processes. Results arederived from reports produced by the system which can then be used to compare what you predicted would happen versus the real outcomes. The bottom line is what gets measured gets improved or discontinued. This is the key formula for success.
Lack a system to get sales from their captive customer base
There is a well used rule that 80 percent of your sales should come from 20% of your customers. Your task is to achieve or exceed this figure. Customers who have previously bought from you are easier and more cost effective to persuade to buy from you than prospects that haven’t. A combination of effective web based crm software and sales forecasting software will give you the insight of historical activity and allow you to search for opportunities in your existing customer base.
