No matter what statistic you read, the failure rate of new businesses is terrible. I have seen the stats as high as 80% failure in the first five years and of the remaining 20%, another 80% fail in the second five years. An accounting firm that works closely with newly incorporated businesses, show their stats as 75% failing in the first five years and then let’s say that of that 25% another 75% fail in the second five years; that’s 6 businesses remaining out of 100 after 10 years.
So why do so many businesses fail? After all businesses owners usually start businesses that they have some expertise or background in. They are often investing a substantial amount of money that has taken them years to accumulate and they usually work long hours to ensure that their customers and clients are looked after. So what’s going on?
Having worked with businesses and business owners in over 4 dozen industries, I can tell you that often the reason businesses fail, is because the owners are often stuck “doing everything” and aren’t focusing on the one single most important thing they should be doing…business development (that’s what I call it so that I don’t scare anyone with the dreaded “sales” word). Without customers and clients you don’t have a business. I once coached a business coach who was very excited about his newly chosen profession, until I congratulated him on his new “sales job”. When he proceeded to tell me that he was a business coach and not a sales person, I had to remind him that he had no clients and therefore was actually in “sales”.
No matter what business you are in, if you don’t have customers or clients you don’t have a business. Revenues are what makes your business a success. Revenues help cash flow. Revenues cover expenses. Revenues make sure that you get paid. Revenues allow you to expand the business.
So how do you get more revenues? You start by making “sales” a priority. I can hear you saying, but I’m too busy replying to emails, putting together tenders, having lunches with prospective clients, doing the actual work, managing my staff, etc. I’ve worked with companies at all levels, and without sales nothing else matters. One company that I worked with had only one person responsible for sales; it was a $60 million-dollar company, and they expected one person to deliver $60M and when the economy took a turn for the worse their revenues went to almost half. They definitely needed more of a sales focus and a better strategy than hoping that one person could keep driving that much revenue.
“I don’t have any more hours in the day to focus on sales.” Let me share a story about my own coaching practice. Years ago when I got started, I had a newsletter that I would mail out to targeted prospective clients. It would take me hours to write the newsletter and then I still had to print them, stuff envelopes, buy stamps, put a stamp on every envelope, and then go mail them all. But I had a 12 year old son who was getting $10 per month for allowance, so I offered him $10/hours to print, stuff, stamp, and mail the newsletters for me. 3 hours later he was done and I gave him $30. He was extremely motivated and excited and couldn’t wait until the next month to do it all over again. What I didn’t do with this “3 hours of free time” is waste it on dealing with emails or filing. Instead, since I knew that these were “bonus hours”, I used all three hours on business development. Understand that I only had a few small clients at the time and couldn’t really afford to spend the $30, when I could have done it for free myself, but I realized that I really couldn’t afford NOT TO spend the $30. I can tell you that those three hours ended up landing me a large client that consequently paid me thousands of dollars while I helped him grow his company.
So, as I said, you can’t afford NOT to do “sales”! Failure is not an option, and if it’s not, then make the time, find the time, steal the time, to do business development. If you don’t have a twelve year old to help you, borrow one. What tasks could you be farming out to free up time to do the important work of growing your company? Start today!