You’ve likely seen the stats…
- 20% of small businesses fail within the first year
- Over half of all small businesses fail in the first five years
- The average annual sales for solo business owners is ~$50k
I didn’t carefully vet the sources* of these stats because the numbers don’t really matter.
These stats (and many general stats like this) don’t tell us much at all.
There are all kinds of product and service businesses across a wide variety of industries.
Catering, landscaping, bookkeeping, graphic design, and fitness training are all service businesses.
Dropshipping, a main street boutique, a protein bar maker, an e-commerce shop selling candles are product businesses.
And there are sooo many other examples.
These overshared small business stats are pretty meaningless. As with any data, the numbers alone don’t help us much at all without context.
The picture doesn’t get any better when you look at the stats that are meant to dig a bit deeper into causes.
Why do all these businesses fail or make so little money?
Here’s what the stats say:
- 82% of small businesses fail because of cash flow issues
- 42% of small businesses fail due to a lack of demand
- 14% of small businesses fail because of poor marketing
These are downright stupid.
It’s like saying the cause of not making money is that you didn’t get any sales.
Cash flow issues, lack of demand, and crappy marketing are not the reasons businesses fail. They are the outcomes of the one thing most businesses fail to do or fail to do well.
Strategy.
They fail to make strong strategic choices based on real and relevant customer feedback, and market research.
I don’t have a stat for this though so you may not believe me. 😛
Anecdotally, I’ve worked with and talked to hundreds of entrepreneurs within the first 5 years of their business. Most of them have yet to stick with any one strategy for long enough to get any sustainable traction.
Many of them, including me, get pulled in by tactics and approaches that seem to work so well for others. At least that’s what the popular kids on LinkedIn and Instagram make us think.
And some of these tactics sometimes work. At least in the short term.
Unless you choose a clear strategy to guide you, you’ll likely end up frustrated, cash-poor, and becoming part (unwillingly) of those failure stats.
Let's not add to those stats
I want you (and me) to have a sustainable and profitable business that helps you thrive and gives you the life you want, for as long as you want.
What does a business like that look like?
You attract and work with amazing clients.
You have an offer people want and will pay a premium for.
You have a solid sales and marketing system that works to bring in new business consistently.
To have an effective strategy that will give you this kind of business, you need to start with positioning.
Powerful positioning that helps you specialize in a way that the market can’t get in the same way from anyone/anything else.
So much gets easier when you have great positioning.
Crafting a premium offer becomes easier.
Determining a price that will allow you to provide outstanding value becomes easier.
Creating meaningful sales pitches and conversations becomes easier.
Designing a smart and effective marketing strategy becomes easier.
Knowing what tactics to focus on in your sales, offerings, and marketing becomes easier.
It’s simple but not easy to craft your positioning, design a strategy, and stick with it. You have to be willing to let go of many things you thought you could do. You have to be willing to limit your choices to get consistent results.
Counterintuitively, when you do this, you’ll feel freer in your business than you ever have. And you’ll know you have what it takes to defy the odds.