Fewer than 50% of businesses survive beyond five years. If you closely examine government figures you will see the evidence
The statisticians state the reason for failure is the failures simply ran out of cash. This description is not very useful and so I decided to find individuals directly and indirectly involved in failed businesses to see if I could discover the details, establish any consistent reasons for failure and publish them on the blogosphere in the hope that my discoveries 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 have not worked out where you are headed then how are you going to get there?” You must have a clear view of what you want to achieve and how the future will be for your business if you achieve it. To achieve anything you need a strategy. Strategy can be likened to a road map it tells you how to get there. It’s a systematic series of activities. Strategy is only effective if it is translated into a business plan which can be used as a benchmark for business performance. A key tool for monitoring business perfomance is the sales forecast.
Lack of a system for marketing or sales
Marketing is about finding markets and testing strategies to position your offering in the minds of prospects and pulling them into your sales funnel. 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 engage prospects. Sales is the process of creating leads, forecasting sales and closing business. In well run organisations a decent marketing and sales system is consistently supported by a well designed sales forecasting software system. Systems like these enable you to track and measure the activity in the sales and marketing processes. These insights arederived from reports created by the software which can then be used to compare what you predicted would happen versus the real outcomes. The point I am making 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 list
There is a common phrase that eighty percent of your sales should come from 20% of your customers. Your task is to achieve or surpass this figure. Customers who have previously bought from you are easier and cheaper to persuade to buy from you than prospects that have not. A combination of good web based crm software and sales forecasting software should give you the insight of past activity and allow you to search for opportunities in your existing customer base.
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