If you watch the news, read a newspaper or go online, you hear about the big newsstands every day; Toy R Us, Pier One, Stein Mart and many more publicly traded companies all going under after decades of being in business. What you don’t hear about is the small business owners going out of business in our country†
Small businesses make up the majority of all businesses, and 70% of them will go out of business within 10 years, according to the US Bureau of Labor Statistics. That’s from a sample of 27,600 companies, and these stats are all pre-Covid-19. The effects of these closures are being felt in all communities and, crucially, in families. In my 20 years of experience as a business consultant, I have seen many owners forced to sell for pennies on the dollar, close their businesses or, worse, file for bankruptcy.† Often this means owners don’t just lose their assets. Instead, they often lose family assets as well, as business owners will raise funds and break the corporate veil by pledging personal assets and signing personal guarantees. In my experience, personal guarantees are required when getting commercial loans, small business loans, real estate leasing and many financial institutions require collateral to secure financing.
There are many reasons why companies fail, but one big one is due to a lack of AIM (always innovate and bring to market!). According to CB Insights, 14% of companies fail due to poor marketing, while 42% fail due to non-genuine or useless products and services, as reported by Fundera. In this ever-evolving digital world, it is vital to keep a business up to date in all facets of marketing. This lack of adaptability, innovation and marketing will almost always lead to failure.Let’s face it, entrepreneurs can easily get complaining and are often married to their original idea on which they founded their business. People don’t like change, especially seasoned entrepreneurs. I always say, “You grow or die, there is no in-between!” Entrepreneurs need to be comfortable with being uncomfortable and this means taking calculated risks. It is imperative for business owners to research their customers, competitors and other industries to proceed with AIM. If we don’t, we will lose market share and eventually die on the vine.
Ask Customers: “What are the 3 most important things you would like to experience when doing business with our company?” Work to understand the buying behavior of your current and potential customer, as buying behavior has changed dramatically in recent years. People used to go shopping for food, clothes, essentials, books – pretty much anything, but now we can just browse our essentials and luxuries in our pajamas from home. In addition, some of my clients have been around so long that their clients are aging… which is why it is paramount to AIM to ensure that your products and services appeal to the younger generation.
The name of the game is AIM, always innovate and bring to market. Don’t just learn from your competition, learn from phenomenal brands in other industries like Apple, Amazon, Disney and so many others. Don’t copy, innovate… and don’t forget to always AIM.