The 6 Untold Reasons Why Businesses Fail


 

I originally wrote this article years ago (which is why there are many old comments at the bottom). But I just updated it (even though 99% of what I wrote years ago is still 100% valid today).

Reasons-Why-Businesses-Fail There have been many articles written on the subject of why businesses fail, and most of them point to the same reasons, such as:

-Inadequate funding
-Bad location
-Lack of a well thought-out business plan
-Poor execution
-Bad management
-Expanding too quickly
-Insufficient marketing or promotion
-Inability to adapt to a changing marketplace
-Failure to keep overhead costs low
-Underestimating competitors

These reasons are widespread and no doubt cause many businesses to fail. However, the reason for a company’s failure is not always something so obvious.

 Below are 6 lesser-known reasons why a business might fail.

Why do these reasons remain untold?

Simple. Most of the time, the business owner doesn’t realize that these reasons are what caused their failure, and consultants generally don’t ask the kinds of questions that would identify them.

1) Focusing on Short-Term Profits Rather than Building Long-Term Value

It’s important to be profitable, but NOT when short-term profits come at the expense of the long-term value of the business and the lifetime value of the customer.

Here’s a real-life example: In the late 1990s, there was a franchise of a national smoothie shop located in West Los Angeles, CA. At this store, smoothies sold for about $4. They cost only around $1 to make, resulting in a solid profit. However, certain ingredients, like mangoes and berries, cost more than the other ingredients, such as juice and frozen yogurt. Since juice and frozen yogurt were cheap, the franchisee put more of these ingredients in their smoothies and less of the expensive ingredients. By doing this, their profit margin per smoothie grew by approximately 20 cents, which seemed great… on paper. Unfortunately for the store, customers weren’t satisfied with the taste of the lower cost smoothies, people stopped going there, and the store eventually went out of business.

As you can see here, it’s important to consider the lifetime value of a customer. Repeat business is way more valuable than short-term profits. Saving 20 cents on a smoothie today will cost you big in the long run.

(Another great example of this concept is Google giving preference to relevant ads in order to improve the user experience, even though there are less relevant advertisers willing to pay a higher price per click.)

2) Ego Business vs. Business Opportunity

The foundation of a good business is a good business opportunity. As an entrepreneur, you want to fill a need in the marketplace. Unfortunately, many businesses are started solely to fulfill an entrepreneur’s ego (or, to put it less harshly, to satisfy one of the entrepreneur’s interests).

This can often be seen in the restaurant & bar industry, where too many entrepreneurs open shop because it’s a “cool” thing to do. Such businesses rarely succeed.

3) Life distractions

The best ideas don’t always come between 9 and 5. A person might have a great idea while driving, or in the shower, or while working out. It’s moments like these when an entrepreneur leaves behind the day-to-day tasks of running a business and gains a better perspective of the big picture.

Sadly, there are a lot of things that can disrupt a person’s home life. Illness, death of a family member, divorce, relationship trouble, and problems with a child are just a few of the many issues that can affect a person’s mindset. When things like this occur, moments of clarity are replaced by stress and anxiety.

Many entrepreneurial ventures depend heavily on new ideas and creative thinking, and when an entrepreneur’s head isn’t clear, business can suffer.

4) Bad feedback & white lies

People like spending time with friends and family.

Unfortunately, when it comes to business, friends and family members don’t always give the best advice. This is especially true at the birth of a business. Nobody wants to be a buzz-kill. No one wants to tell an entrepreneur their idea is bad, or their location stinks, or anything else negative. Most people are conditioned to be supportive of their friends and family regardless of the situation.

Plus, nobody wants to be wrong. Imagine your friend has an idea that you think is terrible. You share your objections, but the friend goes ahead with the idea anyways, and it succeeds. Now you’ll always be the naysayer that never believed in them. Nobody wants to be that person.

That’s why you’ll rarely get honest, objective business advice from friends or family members. And yet, oftentimes friends and family are the first people entrepreneurs turn to for advice.

5) Maybe the owner is just a jerk

There are a lot of great people in the business world, but there are also some jerks. And these jerks sometimes start their own companies.

A jerk, in this case, is someone who a lot of people can’t get along with. Maybe it’s because they’re a super-perfectionist, or they yell a lot, or they demand that everything be done in a certain way, or they constantly complain. Or maybe they’re annoying in some other way.

The key is that nobody -- not employees, customers, partners, suppliers, clients, etc. -- wants to give 100% for a jerk. Clients and customers will be turned off, and employees will start cutting corners. Most people believe that life is too short, and don’t want to spend their time working with someone they can’t get along with.

6) The entrepreneur never took the full leap

In most new business attempts, the entrepreneur never leaves their day job, or they create a back-up plan, or they have a job lined up in case the new business fails. In these cases, failure IS an option, as the entrepreneur has a safety net to fall back on. In cases where failure is NOT an option, and the entrepreneur depends on the new business to provide food, shelter and clothing, the business has a greater chance of succeeding.

There’s a great example of this concept in this NY Times article. Xiang Yu was a third century (B.C.) General in the Chinese army. He led his troops into enemy territory by crossing the Yangtze River. Then, in order to inspire his troops, Xiang Yu took some unorthodox measures. He burned all of his troop’s ships and destroyed all of their cooking materials. This left the troops with only two options: Move forward and conquer the enemy, or perish. The maneuver did not make Xiang Yu very popular with his soldiers; nevertheless, the troops advanced and ultimately emerged victorious.

Xiang Yu’s methods might be a little drastic in this day and age, but the moral of the story is what’s important. Author Anita Roddick has said that entrepreneurship is a matter of survival, and the truth is, if you’re not totally committed to your business, your chances for success will be greatly diminished.

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Client Referrals: Why You Need Them and How to Get Them


 

Client ReferralsA recent survey of business owners showed that 41.4% of businesses count on referrals for over 80% of their sales.    

I actually don't believe this statistic; I think it's way too high.    

But the statistic is very exciting. Because it means that these 41.4% of entrepreneurs are doing it right; because getting referrals is absolutely critical to your business' success.    

Let me explain.

To begin, referrals generally don't cost you any money. So rather than spending $X to acquire the new client, you spend $0. This dramatically boosts your profitability.

Second, getting referrals boosts your average profit per client. For example, let's say your average profit per client is $50. Now, let's also assume that 20% of your clients refer you one additional client.

What that means is that for every 10 new clients you get, you actually receive 12 new clients (including the 2 referrals). Since each client gives you a profit of $50, you've generated $600 in profit from the 10 initial clients. So, your profit per new client goes from $50 ($500 divided by 10) to $60 ($600 divided by 10).

Yes, it's exciting that your profit has gone up 20%. But what's even more exciting is that you can use this increased profit to dominate your competitors. For instance, if your competitors are still only earning $50 profit per client, they can only spend up to $50 per client in marketing expenses. But since you're earning $60 profit per client, you can actually spend more than $50 in marketing to acquire a new client.

This allows you to advertise in more places and in places that your competitors can't afford. This will drive tons of new clients to you instead of your competition.

In summary, getting referrals can allow you to significantly boost revenues and profits, and allow you to dominate competitors. It's a surefire way to make your business plan more profitable!

Now, if referrals offer such a great benefit, why do 58.6% of entrepreneurs fail to effectively use them?  The answer is that they haven't set up an effective referral system.

So here are the keys to an effective referral system.

Step 1: Make the Client Want to Give You a Referral

Clearly, your clients must be happy in order for them to give you a referral. So, make sure you satisfy their needs and fulfill the promises you made them when they purchased your product or service.

Step 2: Ask for the Referral

With a job well done, some clients will give you referrals on their own. But you'll dramatically increase the number of referrals you receive if you simply ask for them.

Of critical importance is to ask 1) at the right time, and 2) multiple times. With regards to the former, if a client needs to use your product/service in order to be satisfied, then you clearly can't ask for the referral immediately. Rather, you'll have to wait until they've used your product/service and can vouch for its success.

With regards to the latter, it is critical that you ask clients multiple times for referrals. You need to do this for several reasons. The first is that clients are often busy and if you ask at the wrong moment, they simply might not have time to give the referral.

Secondly, it's possible that today one of your clients does not have a new client they can refer to you. But maybe in a month they meet someone that would be a perfect fit for you company. But unless you ask for the referral again then, they'll probably forget to give it to you.

In asking clients for referrals, don't just ask them who they think might be a good fit for your product/service. Rather, it's more effective if you guide their thinking. For instance, you should ask, "I know you're a member of the XYZ organization; do you know anyone else in the XYZ organization that could benefit from our product/service?" This allows your client to focus their thinking in order to find more potential names for you.

Step 3: Effectively Contact the Referral

Clearly, once you receive the referral, you need to contact them and try to close the sale.

A key tip here is to ask the referral source to let the referral know you'll be contacting them. As such, rather than contacting the referral cold, you'll receive a warm introduction that will make the referral more likely to speak with you and buy your products/services.

Step 4: Putting it All Together

The key to a successful referral program is to formalize and systematize it. It shouldn't be something that one of your employees does once in a while. But rather, it should be a sequence of events that always happens.

For example, your system might include the following: Ten days after a sale is made your client gets an email requesting referrals. Fifteen days after a sale they receive a postcard. And then 28 days after the sale, your salesperson calls them to request referrals.

In addition to systematizing your referral program, you need to maintain statistics so you can see what's working and what's not working. For example, you should track each of your referral attempts and see which ones lead to new clients and which do not. And then you should tweak them (e.g., change your email to offer an incentive for the client to give you a referral), and track which tweaks work and which don't (and clearly keep using the ones that did work).

A quality referral program will increase your revenues and profits, and can give you real competitive advantage. So build your referral program today!

Suggested Resource: Growthink's Ultimate Marketing Plan Template allows you to quickly and expertly create your marketing plan; and exponentially increase your customers and revenues by developing your referral program and orchestrating the 5 key marketing levers. Click here to learn more.

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How to Unlevel the Playing Field


 

You've probably heard the term "a level playing field" which refers to a scenario where everyone has an equal chance of winning.

For example, the desktop computer leveled the playing field by giving individual entrepreneurs virtually the same computing power as individuals working at multi-billion dollar companies.

When starting a business, you should choose a space where the field is level; meaning going into a market where you have a fair chance of winning.

But after you start your business, and/or if you have a more mature business, I encourage you to unlevel the playing field.

What I mean by unleveling the playing field is to make it so that nobody wants to compete against you. I want you to have an unfair advantage (using ethical tactics of course) so that you win the game.

So how can you unlevel the playing field? One of the best ways is to create organizational assets that your competitors don't have.

Here are five examples of organizational assets you can build:

1. Customers: Most mobile phone companies offer 2 year service contracts that all new customers must sign (and face penalties if they leave before the two years are up). This essentially "locks up" customers making it harder for new entrants (or existing entrants) to come in the market and take their customers from them. Customer agreements and contracts are one of the most powerful organizational assets you can build.

2. Systems: Most franchise organizations (e.g., Dunkin Donuts, McDonalds) have made significant investments in systems such as systems to serve customers, produce products, handle customer complaints, etc. These systems make it easier and less expensive to hire and train employees and better service customers, making it harder for others to compete against them. Likewise, I know many companies who have built customized software systems that allow them to perform faster, cheaper, and more consistently than their competitors.

3. PPE (Plant, Property and Equipment): When I was a teenager, I made a lot of money shoveling snow. I used that money to buy a snow blowing machine. Equipped with the snow blowing machine, I was able to remove snow ten times faster than my competitors. This allowed me to dominate the market.

4. Product or Service Variations: A local pizza shop promotes itself as having 36 varieties of pizza. Offering this large variety makes it harder for new pizza companies to enter the market. Because a new company would have a very hard time creating 36 varieties from the start, it would be harder for them to satisfy customers.

5. Partnerships: I've created several partnerships with major websites and organization to be the only business plan provider they promote. This excludes my competitors from working with those organizations and serving their customers.

What I want you to consider now is how you can build organizational assets that unlevel the playing field. How can you make it so that nobody wants to compete against you?

  • Can you lock-up customers with agreements and contracts?

  • Can you build new systems to make your company more effective and efficient?

  • Can you make investments in plant, property and equipment that allow you to cut costs or increase output?

  • Can you develop new product and/or service options that better serve customer needs?

  • Can you form exclusive partnerships to help you gain new customers that your competitors can't?

Importantly, whatever answers you come up with, realize that building these organizational assets will take time. Often times they may take as much as a year (or even longer). So make sure to properly plan their development. Set a long-term goal for when you want the asset built. And make sure that you build time into your daily, weekly and monthly schedules to move the development forward.

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The Secret Formula to
Building a $10 Million Company

If you want to build a $10 million+ company, you must focus on building Value. And to build Value, you need to follow a specific formula.

In this video, I layout the precise formula for you.

As you watch the video, you’ll see the important schematic below:

Don’t be overwhelmed by its complexity, by the time you see it, it’ll make perfect sense. And you’ll be able to follow it to dramatically grow your business.

Click here to watch the video now

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Why SBA Loans Make Sense For Banks & Business Owners


 

A great source of funding to start or grow your business is SBA loans.

SBA loans are issued by private banks. However, the United States Small Business Administration (SBA) guarantees a percentage of each loan. What this means is the following: if you, the entrepreneur or business owner, default on the loan (i.e., can't pay it back), the issuing bank only loses a small percentage of the money it lent you. The United States government essentially pays for the rest.

Because of this guarantee program, banks don't bear as much risk and are much more prone to issue SBA loans. This makes it easier for entrepreneurs like you to get these loans. Conversely, without the program, banks wouldn't make as many loans, and fewer businesses would get funding.

When small businesses grow, everybody wins. The entrepreneur can start or grow their business. In doing so, they create jobs. And their employees then have money to buy things. And the economy grows.

Small business funding challenges during the recession

But, as you may have noticed, business owners are still having trouble getting access to capital, namely 1) Small dollar loans, and 2) Loans in the niche industries affected by recession, such as real estate, finance, etc.

If you think about it, most small businesses don't need $1 million or even $500,000, and wouldn't even know what to do with it all. In many cases, even $100,000 can go a long, long way towards boosting revenues (or even doubling them) if invested in more lead generation campaigns, building a sales team, etc.

The odds are you can suffice with a smaller loan amount. In the past this has been more difficult because banks are geared towards extending larger loans since they can earn more interest for the same amount of due diligence per loan.

What the SBA is doing for small businesses

The SBA recently launched two loan-guarantee revisions that simplify and streamline paperwork even more for banks and borrowers.

One of them, the Small Loan Advantage program, is off to a strong start. It allows banks to make loans at more affordable rates, and brings more opportunities to borrow smaller loan amounts, like $50,000 to $100,000 or even less....which is great if that's all you need!

Applying for a small SBA loan from banks

To take advantage of this for yourself, find out which local bank makes the most SBA loans. You can often find this information on the bank's website. Or you can visit the branch or call them. Ask them how many SBA loans they make and how often they fund loans in the dollar range of what you need.

Find the local bank that is most active in the SBA loan program and apply for a loan. If the bank says you're not ready for the loan, don't hesitate to ask them why. Ideally, you can then fix the issue, and come back shortly thereafter and get the loan.

The SBA wants you to succeed as an entrepreneur and business owner. As mentioned, when you do, you will create jobs and stimulate the economy. So consider SBA loans as a funding source; they might be perfect for your business.

Suggested Resource: Want funding for your business? Then check out our Truth About Funding program to learn how you can access the 41 sources of funding available to entrepreneurs like you. Click here to learn more.

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10 MORE Obstacles That Are Limiting Your Success


 

The other day I wrote an article entitled "10 Obstacles That Are Limiting Your Growth." In it, I revealed 10 common things that block entrepreneurs and business owners from achieving the success they deserve.

Those 10 obstacles included:

1. Lack of Skill
2. Bad or Negative Attitude

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10 Obstacles That Are Limiting Your Growth


 

There are many mental and personal blockages that can hinder you from achieving your full potential in business. Blockages in business can be compared to fatty deposits around your arteries that impede blood pumped from the heart from reaching its destination.

For you to succeed in your business, you must identify and eliminate such blockages promptly.

Here are 10 common blockages that can impede your success. As you read through the list, mark any of them that might be affecting you and/or your business:

1. Lack of Skill
- As information increases, many business owners soon find out that there is much to learn. Whether it's getting up to date on new tax laws, learning about social media, or practicing negotiation techniques, take the time to keep your skills sharp.

2. Bad or Negative Attitude
- While it may be easy to learn new skills, attitude is what makes or breaks a company. Whether you think you can or think you can't - you're right! Check your attitude frequently.

3. Lack of Focus
- I always tell people that if they do one thing, they can do an A+ job; but that the second they do something else, they can only do a B+ job on each. And the bottom line is that to succeed in business, you must do an A job or better. So, make sure you focus on specific projects so you can excel at them.

4. Procrastination
- Procrastination is high among the top five time wasters. Creating deadlines is an effective way of preventing procrastination. Though it may feel restrictive or even stressful, having a deadline can activate your brain and infuse new thoughts and ideas.

5. Monotony
- It pays to try out something new once in a while. There is always a new instructional video with a different method from the text book methods learned in school. Doing something differently offers you the necessary relief from the routine and repetition that is common in many businesses.

6. Control Issues
- Sometimes the tiny voice in your head may urge you not to give up control, so you end up micromanaging everything. It is important to have faith in the people you hire. Hiring qualified people for your business helps you to focus on specific tasks and minimizes your chances of overworking yourself.

7. Overworking Yourself
- Sometimes you may overwork yourself even without realizing it. When you get overworked, you become less productive. Take it easy, go on vacation if possible. Your decision-making abilities become compromised when you are tired. Stick to a schedule and get some rest.

8. Seeking Approval
- In business, you may sometimes unconsciously or even consciously wait for someone to encourage you or give you permission to take a step. Acknowledge your own abilities and make decisions on what is best for business, not based on pride of emotional approval.

9. Lack of Creativity
- Keeping a journal can remedy a lack of creativity. Sometimes a new idea will pop up at a random time or place. Jotting down ideas and inspirations helps to unblock your mind. Apart from noting down random ideas for future reference, journals provide a useful way to track personal progress.

10. Thinking Small - With the current technological capabilities, it is easy to access success stories. Surround yourself with people who think big. Read books, blogs and watch motivational videos, etc. In business, if you aim low, you strike low. Aim high. 

How many of these blockages did you circle? There is no right or wrong answer. Whether you picked one or twenty, you have work to do. Study the blockages you marked and start with the one you feel is impacting you the most.

Work on removing this blockage for 30 days. Then pick the next one that is having an impact on your business and start working on that one. As you stretch beyond your comfort zone and tear down barriers, your business will grow.

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Crowdlending for Entrepreneurs Is Finally Here


 

What Is Crowdlending?

In brief, Crowdlending is when individuals lend you money.

This is important because oftentimes banks don't want to lend money to entrepreneurs and small business owners.

Crowdlending eliminates the banks as an intermediary and allows individuals to lend money to other individuals. Another name for Crowdlending is "peer to peer" lending.

A Brief History of Crowdlending

Crowdlending has been around for several years. The biggest two Crowdlending companies/websites are Prosper and Lending Club.

While the crowd-loans on these sites are structured as personal loans to the business owner, they can be used for business use. For example, small business owner and clothing designer Lara Miller has received three loans via Prosper which she used to launch her new website and clothing lines.

Clearly, you could consider taking a loan for your business from a friend or family member. However, with Crowdlending, you have a much larger number of potential lenders. Also, while not being able to repay your loan is always a terrible situation, it's clearly worse when you know and see the lender often.

Additionally, many individual lenders on Crowdlending websites take a portfolio approach. That is, they lend to several people. So one of their loans defaulting may not be devastating to them as it might to a friend or family member making just one loan.

Debt Versus Equity


In brief, raising equity is selling shares of your company. You are not required to pay interest on the funding or the principal back. However, the investor owns a piece of your company and if/when you exit, they will take their share.

Conversely, with debt, you have to pay both interest and the principle back.

It is important to note that equity is oftentimes MUCH more expensive than debt in the long-run. Let me give you a simple example.

Let's say you sell 40% of the equity in your business for $1 million. A year later, you are able to sell your company for $10 million. The investor would get $4 million of the sales price (40%). So, the cost to you of the $1 million investment was $4 million.

Conversely, let's say the investor lent you the $1 million at 10% interest. In that case, the cost of the funding would have been $1.1 million - which is the principle and interest you would have to pay back.

In this scenario, debt funding would have cost you ONLY $1.1 million, nearly 75% less than the $4 million cost of equity funding.

Crowdlending Versus Debt


Crowdlending, gives you several benefits over traditional debt or bank loans:

1) Your chances of raising Crowdlending are much higher since banks reject many more loan applications

2) Crowdlending gets you lower interest rates than banks because you are eliminating the bank as a "middle man"

3) Crowdlending has much fewer requirements with regards to the application and documents you need to submit

4) Crowdlending dollars are generally raised much faster than bank loans

Crowdlending For Businesses

I have been telling entrepreneurs about Prosper and Lending Club for years. Because they are relatively easy and low-cost forms of funding. However, they both have a big negative, in that you can generally only raise loans less than $35,000.

That's why I will thrilled when I recently spoke with Endurance Lending Network.

Endurance has amassed a bunch of non-bank lenders including successful entrepreneurs, wealthy individuals, family offices and institutional investors. And, these individuals lend between $25,000 and $500,000 to businesses - the amounts entrepreneurs and business owners actually need.

Conclusion

Crowdlending is a great new way to raise money to start or grow your business. It's much easier, faster and less expensive than both bank loans and equity funding, making it a perfect choice for most entrepreneurs and business owners.

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Fast-Track Millionaires: 5 Modern Success Stories to Replicate


 

Becoming a millionaire entrepreneur is possible, and many people have shown us how they managed to quickly build empires.

If you are an entrepreneur and are looking for inspiration, then these 5 modern success stories will certainly motivate you.

1. Sara Blakely

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The Two Most Important Quotes In Business


 

If you don't know Peter Drucker, you should: he's known as the man who invented modern business management.  He wrote 39 books on the subject and is widely regarded as the greatest management thinker of all time.

And Peter Drucker is credited with two of the most important quotes in business management.

Here's the first: "If you can't measure it, you can't improve it."

When you think about this quote, it should immediately become apparent how true it is. Because, if you can't measure something, and know the results, you can't possibly get better at it. For example, it's nearly impossible to lose weight without stepping on a scale once in a while to measure your results - if you don't, you have no idea if you are succeeding or not.

Or it's like trying to improve your golf game, but never keeping score, so you don't know if you're actually getting better or not. Makes sense, right?

Now, in business, Drucker's quote is particularly true. If you can't measure every part of your business, you can't manage or grow it.

For example

  • Do you know the number of new website visitors you received in the last 30 days?

  • And do you know what percentage of them turned into new paying customers?

  • And do you know how the level of satisfaction among your customers has fluctuated over time?

  • And do you know the precise average lifetime value of your customers?

There are nearly 50 questions such as these that measure each aspect of your business.

And if you don't know the answers, if you can't measure them, then you can't possibly manage or improve them.

And that's why your sales are too low, profits are too low, employee performance isn't high enough, and you need to work too hard and can't take enough time off.

Now, let's move on to Peter Drucker's second famous quote: "Management is doing things right; leadership is doing the right things."

Let's start with the first piece of this critical quote. "Management is doing things right." Well, as we learned from Drucker's first quote, you can't manage and you can't do things right in your business if you're not measuring it. So that's not happening and it's hurting your business.

And now the second piece: "leadership is doing the right things." So, my question for you is this: are you doing the right things in your business? Now before you answer this, let me ask you this: do you know exactly what you should be doing, every single day, to generate the most value from your time?

For example

  • Do you know when you should focus on improving your website?

  • Do you know when you need to spend time on improving customer satisfaction?

  • Do you know how much attention you need to give to securing new clients?

  • And do you know when you should focus your time on better training your team?

Unfortunately, most entrepreneurs and business owners don't. Or their businesses would be much more successful than they currently are.

I give you these two Peter Drucker quotes along with their interpretation to help you figure out the answer to the question, what is the #1 Business Mistake you are making.

Which for most entrepreneurs and business owners is this: Your #1 business mistake is that you're running your business blind!

You're not measuring your performance throughout your business, so you can't improve. And worse yet, you don't really know what you should even be focusing on

It's like running around in a maze, and you haven't kept track of where you've been, and you're not sure what to do to get out.

But don't take it personally, virtually all entrepreneurs and business owners operate like this. And that's why business failure statistics are so terrible. As you might know, according to Dun & Bradstreet, 91% of businesses fail within 10 years. And according to United States Census, only 3.9% of businesses make it to $1 million in sales. And only 0.6% of businesses make it to $5 million. And less than 0.1% make it to $10 million and above.

The reason for this lack of success is that these entrepreneurs and business owners are running their businesses blindly. They are not measuring performance, so they can't improve. And they are focusing their time on the wrong areas of their business.

Now the good news is that there is a solution to this common problem of running blind. And it's called BI or Business Intelligence. Business intelligence or BI refers to computer-based techniques used to spot, dig-out, and analyze business data, such as sales, marketing and production in order to make significant improvements.

Importantly Business Intelligence uses the data you already collect in your business. For example, if you have a website, you probably have Google Analytics or another program installed that captures key information like the number of visitors you have to your website each day, where they are coming from, and what pages of your website they are visiting.

And you're probably using an accounting software like Quickbooks that includes information about your revenues, expenses and cash balances. And you might be using a customer relationship management or CRM system like Salesforce.com that identifies the number of leads and sales you generate.

And you might be using an email management system like Constant Contact or MailChimp that shows how many email subscribers you have and how often they open or click on your emails.

With the right Business Intelligence system, all the information from these applications and programs you already use automatically and in real-time is entered and analyzed. So you can quickly see, manage and improve your performance.

Importantly, you not only measure performance so you can improve it, but you instantly spot weaknesses in your company. And those are the areas you should focus your attention on. Remember, "leadership is doing the right things" - now you'll know exactly what you should be doing.

Ready to stop operating blindly? If so, check out Growthink's Business Intelligence solution, The Growthink Dashboard, by clicking here and start expertly managing and growing your business.

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Lead Generation - Your Top 5 Lead Generation Questions Answered


 

Lead generation is critical for all entrepreneurs. And once you master it, your business will thrive.

To help you with lead generation, below I have answered the most common questions entrepreneurs. However, let me start with some definitions.

Your "leads" are simply your pool of prospective buyers who might be interested in your product or service.

For physical stores, your lead list can be residents in a certain zip code or a list of shoppers with certain demographic characteristics. For online or virtual businesses, your lead list is often defined as the list of prospects that subscribe or "opt-in" to your email list or otherwise contact you so you have their contact information.

Whether online or in a physical store, communicating with your lead list is a primary marketing strategy for generating new and repeat customers.  A general rule in marketing is: the bigger your list of leads, the more opportunities you have to generate new clients and sales.  This is why lead generation is so important.  Sound lead generation tactics grow your lead list.  Great lead generation strategies grow your list with prospects that are most likely to buy.

Below are answers to the most common lead generation questions I get:

1. How Do I Create a Lead List?

There are many ways to start building your lead list. The easiest is to put an opt-in box on pages of your website where visitors can register their email addresses - typically in exchange for content or freebies. Most websites offer free guides, e-books, tools or a newsletter.

You can also offer free samples of a one-time discount coupon.  Make sure the freebies are enticing.  Once the website visitor opts-in to receive the freebie, he or she now becomes part of your email list.

2. Does My Target Audience Matter?

Yes.  Know your niche and determine the people you want to target. This important element should be clear to you from the beginning. You will likely fail if you do not understand what type of customer best appreciates your product or service.

Once you truly know your target audience, you can do a better job of "talking" to them on your website. For example, you will use different verbiage to convince a 20 year old, single, suburban woman to buy your product than you would to convince a 60 year old, married, rural man to buy it, since each has different wants and needs.

3. How Will My Audience Find Me?


In order for your prospective customers to find you, you should be promoting your website in places where your targeted audience already frequents. For example. Let's say your business sells electronic gadgets. If so, make sure customers find you on other websites that discuss electronic gadgets. You can advertise on these sites or submit guest blog posts and articles to them. You can do the same with social networking groups that discuss this topic. In many cases you can also pay the other websites to send an email promoting your company to all their subscribers.

Likewise there are other tactics to reach these customers such a direct mail, door hangers, radio spots of TV ads.  Naturally, you must align your strategy to your specific product or service, and to your budget.

4. What Should I Put On My Site To Attract Visitors To Opt-In Or Buy From Me?


Content is key. When your visitors find your site helpful and informative, it will be easier for you to get them to opt-in or buy. They will see you as the expert and be hungry for more information from you. The key is to provide quality content that gives solutions to your audience's problems.

Also, the more quality content you have on your website, the more other websites will link to you and thus drive new visitors. Likewise, these links will boost your search engine rankings, so you'll get more organic search traffic.

5. How Do I Maximize Social Media In Getting More Opt-Ins?


Most of your customers are using social networking sites (event if you're in the B2B space). Build your reputation as an expert in your niche when you are creating your social media presence. Become the "guru" of your circle of influence and continuously expand that sphere of influence. 

Even brick and mortar businesses have a huge opportunity to build genuine, trustworthy relationships with clients and prospects on social networking sites. Offer tips, publish sales offers, share today's menu, teach a skill, publish testimonials and so forth. These steps create opportunities to get followers and convert sales.

It's All About The Relationship

A growing email and/or lead list is crucial for business growth, especially for businesses that operate online.  You can publish a website or open an online store and HOPE that customers come.  Or you can build top-notch content and opt-in system that allow you to communicate and build relationships with your prospective customers. 

It's a common phrase that "people do business with people they know, like, and trust."  Using social networks and content generation strategies (like newsletters and quality emails) you can develop strong bonds with people who you will never meet in person.

The strategies detailed herein will deliver prospects to your business that are interested, ready, and able to buy your products and services. It will take some time to implement these strategies, so get started now!

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