Managing a start-up presents a number of challenges that are difficult to overcome without the proper guidance and experience. In fact, over 50% of small businesses will fail within their first five years.
A small business can fail for a number of reasons. In our experience working with start-ups, it is often the result of a combination of many different factors. Here is a breakdown of three of the most common reasons why small businesses fail:
1. Expanding too quickly
In the early days of a small business, it is important that your team focuses on what makes you great – your core competencies.
As small companies try to grow too quickly, managers often end up wearing “too many hats” – they take on too much responsibility.
Managers tend to drift away from the areas in which they are most skilled and passionate, and it pushes them into roles they are not qualified to take over.
We’ve been there before.
In the early days of our company, we were close to going out of business on four separate occasions.
The reason: we expanded too quickly, took on too many roles, and tried to do everything for our clients. Custom projects took their toll on our productivity, and we were unable to effectively scale our business.
When we adjusted our scope and returned to our core competencies – digital marketing and small business growth – we were able to reignite our passion for the industry and find success.
Through working with small businesses, we noticed that it was difficult for them to perform their day-to-day operations while also focusing on growth.
However, creating organic growth for companies through digital marketing is exactly what we are passionate about – it is our core competency.
Rather than struggling to grow your business while simultaneously providing high quality services for your current clients, let a growth expert handle your marketing, so you can focus your efforts on your core services.
2. Not utilizing targeted marketing
Small businesses worldwide spend over 20 billion dollars each year on marketing campaigns focused on growth, yet over half of them will still fail. This is largely due to how they spend their marketing dollars.
Through working with small businesses, we noticed two consistent issues: they spent too much money on advertising campaigns without any specific targeting or direction; or they did not have a website, social media presence, or digital marketing strategy at all.
Unfortunately, as much as 50% of small businesses do not have a marketing plan in place, and their long-term goals will suffer for it.
So, where do you start?
Targeted marketing is crucial in the digital age. Rather than spending huge amounts of dollars on mass marketing campaigns, you can drive results and save money by advertising directly to your target audience.
First, start by identifying your target audience and creating a strategy that will appeal to their needs.
Think about your perfect client…
From their industry and job title to their specific pains, you can use this information to find where they spend their time online and reach out to them directly.
By utilizing social media, email campaigns, LinkedIn, video advertising, and other digital methods, you can identify and source qualified prospects that are in need of your product or service and advertise directly to them.
In this way, targeted campaigns will drive qualified leads to your business – leads who are already interested in your product or service and who are ready to buy.
This will cost a fraction of mass media campaigns and will produce more lucrative results.
3. Ignoring data metrics and analytics
Many small businesses struggle to track and analyse data. Some have difficulty tracking their sales on a monthly basis. Others do not keep track of the return of investment (ROI) on their campaigns.
With so many platforms and data tracking methods on the market, it can be overwhelming for small business managers to learn exactly which methods are producing the best results.
After all, this kind of analysis is probably not your core competency, which suggests you might be wearing “too many hats.”
That’s where data tracking comes in.
Data tracking helps you gain a better understanding of your target market and what drives them to buy. The more narrow the target market, the easier it is to advertise to them.
For added efficiency, utilize a variety of A/B testing strategies to experiment with different marketing campaigns.
By tracking the success of each micro-campaign with tangible numbers such as sales, you can calculate your ROI and analyze which campaigns are most effective.
Through targeting the best campaigns for your industry, market, and audience, you can effectively reduce the amount of money you need to spend on marketing.
In this way, you can create qualified leads and maximize your ROI while simultaneously reducing your marketing expenses.
As a small business owner or manager, your time is precious. You should only spend your time on the most important tasks within your area of expertise.
At eRational, helping small businesses succeed is our area of expertise.
We understand how to create organic growth using social media and other digital platforms, and our comprehensive digital marketing campaigns drive results by finding qualified prospects who are ready to buy.
With this method, we have generated over 500 000 leads and more than 38 million dollars in revenue for our clients.
Let us act as an extension of your marketing team. Together, we can optimize your digital marketing efforts and maximize the ROI on your campaigns.
For more information about our marketing services, or to book a consultation with one of our executives, call us at (647) 206-1503 or visit our website here.