Have you ever wondered why most new businesses fail?
What I’m going to talk about in this post will probably make you feel a little uncomfortable, and maybe a little annoyed, as it will definitely make building a successful business a longer process for you. But I guarantee that if you take the advice within it, you will have a successful business that is both attracting new customers AND making money for you much faster!
Okay, let’s explore some of the reasons why most brilliant new businesses fail.
Can you relate to any of this?…
“I want to do this but I don’t know how to get customers to my business”
“I want to be a full time business owner but I’m not making any money from it”
“I’m telling everyone I know about my website and asking them to share it but I’m still not getting any new visitors”
“I know it’s possible to turn a business around in a short space of time but I just can’t seem to get it working for me”
Did reading those statements have you nodding your head? Did you feel despondent?
You have got so many great ideas, dreams and goals for your business and you are so excited about it
What if no one buys from you? What if you it doesn’t work out for you and you can’t make your business dream a reality?
You probably joined a load of Facebook or Pinterest groups for businesses and you are hearing all the time that it’s hard to build a successful business these days right?
You may have even heard of those who have proclaimed that your marketplace is saturated or it’s too complicated to start a business these days.
Business owners quit every single day. This is a reality that you must accept, and get used to.
It’s enough to make you think that perhaps those people who say it’s a waste of time are right and that no one these days can make a living from a small business.
But you’d be wrong. Let’s look at some actual FACTS.
FACT: Why you CAN turn your dream into a full-time business (this is important)
There were 5.6 million small businesses at the start of 2018 which is 2.2 million or 63% more than there were in 2000
In 2018 there were 1.4 million employing businesses and 4.3 million non-employing businesses. Therefore, 75% of businesses did not employ anyone aside from the owner(s). That means most of these new businesses are small businesses.
SMEs account for at least 99.5% of the businesses in every main industry sector.
Notice that it’s getting more popular?
That means that there is still plenty of room for more businesses.
Businesses just like YOURS!
But how about paying the bills? Can you really make a living from a small business?
Okay, I know, you want evidence – hard cold facts. So here you are. Here are some income reports from top businesses.
Did you notice that this is income each MONTH not each year? Not too shabby eh?
I also did a poll of over 5,000 new businesses from all over the world to find out what they were earning in their first year, and here’s what I found out…
Businesses with no definite marketing strategy: £0 – £3,000
Businesses using affiliate marketing: £500 – £8,000 per year
Businesses selling own courses or products: £10,000 – £30,000 per year
These are averages of course but we can learn quite a lot from the information here…
Having a strategy really helps to build a business faster. Having your own products and services will earn you more in the early days.
(When I first started my business and created my website, I had a few affiliate links scattered about and a few of my own little mini-courses that I charged £9.99 for. I was making a whopping £500 per year. Since learning to market myself strategically I am now making that a day. I share this not to gloat, but hopefully to instil in you the importance of working strategically. You are going to need a plan for your business if it’s going to be successful and make you money).
To get back to my survey of new businesses, even conservatively, and with no real marketing strategy it is possible to make money from your business, our average new business owner was making $3,000 per year in their first year. That’s not too bad at all is it?
Imagine having an extra $3,000 next year. What would you do with it? Vacation for your family? Special gift for someone? Pay off some debts?
Let’s put some figures behind those facts and see how you can build your business as quickly in real life terms
Let’s say you are in the information sector, a coach, mentor, tutor, trainer or other similar profession. Instead of exchanging time for money, ie working with one client at a time, you could vastly increase your income by digitising your services. Let me explain…
Let’s say you create a digital course. Let’s say you charge £200 for the course. If you sell just 10 courses a month you will earn £2,000/month. Over a year that’s £24,000 – and that’s just for one course.
Now let’s say you also sell someone else’s course, a top player in your industry who’s course you took and found to be invaluable. Let’s say that course is £2,000 and you get 50% commission for each one you sell. If you sell just 10 of those in a whole year you will have earned £10,000. Wow, your income is now £34,000 and you haven’t even left the house.
What if you are a photographer? How can you make money this way? Find photography equipment on Amazon, or a local trader and become an affiliate for them. Recommend cameras and equipment and get paid for the recommendations and subsequent sales.
This strategy can work for ANY industry.
I like to show things in monthly terms because a successful business is based on recurring revenue. You need to manage the months, quarters and years in terms of growth. You also need to be able to predict your revenue if you are to build a successful business from scratch.
The average earnings are £29,000 in the UK according to www.ons.gov.uk
So if you’re making £29,000, I think we can safely say that you’re doing okay.
And bear in mind that this is a conservative estimate taken from brand new businesses in their first year. What if you sold 15 courses a month and make 20 affiliate sales? Your earning have now reached £43,000 – and that’s from one course and one affiliate link. What if you had 2, 3 or 4 of each?
Potentially you would now be making well over £100,000 per year from your small business. Do you still think it’s not possible to make money from your new business or that it’s a waste of time to even try?
I’ve made thousands of pounds from just my online courses. Here’s a snapshot of my PayPal receipts for just one week.
Do you notice the recurring payments? These are amounts that I receive month in, month out from people who are paying for courses that offer a monthly payment option. You can easily set these up too.
So, take a deep breath and gather yourself. You now know that you CAN make a living doing this 🙂 and there’s more than enough room for you as a new business too.
So, tell me honestly, why most new businesses fail.
There are a lot of gloomy facts about the failure rate of new businesses. Here are some facts which were gathered by smallbiztrends.com between 2011 and 2016
Although these numbers do fluctuate over time, and within industries, the honest truth is that more than half of new businesses do not last into their fourth year and according to one Gallup poll 80% of new businesses folded within their first year.
I started my first business in 2012. I was part of a community of over 200 new businesses. Today there are just 5 of us left. Just 5 who are making a living out of our businesses. That’s a whopping 97.5% failure rate, or, as I prefer to look at it, a 2.5% success rate.
What happened to everyone else?
Well I guess they are back doing whatever it was they were doing before. Very few businesses are able to make a full time living out of it and most of the ones I started with quit theirs years ago.
What was the problem, I hear you cry?
This is the annoying, but massively helpful part of the post so listen up!
They focused on getting their business to make them money right away.
Are you a little bit confused right now?
At this point you are probably saying to yourself “well how’s that a problem, isn’t that what you’re supposed to do?”
Here’s why that seemingly logical thinking is actually 100% wrong…