100+ Video Marketing Statistics, Facts and Trends 2018

100+ Video Marketing Statistics, Facts and Trends 2018

 

 

Are you aware of the recent video marketing statistics?

They are mind-blowing!

During last few years video marketing and video as a format developed on a light speed. Video marketing now takes market shares away from traditional TV and other adjacent marketing channels.

The power of video marketing is impressive.

Businesses of all sizes cannot afford to ignore this marketing channel anymore. So, make sure you consider leveraging this opportunity for the benefit of your business.

In this article we gathered 100+ breathtaking video marketing stats, facts and trends to shed more light on it for you.

 


 

Quick Outline:


 

 

General (Shocking) Video Marketing Statistics & Facts

 

 

1.  Globally 25% of people watching online video every day.

 

2.  One third of all online activity is spent watching video.

 

3.  65% of users watch more than 3/4 of a video.

 

4. 87% of internet users in the U.S. watch online videos.

 

5.  Video content uploaded in a single month is more than all three main U.S. TV networks combined have created in 30 years.

 

6.  45.5% of all internet users watch at least one online video per month.

 

7.  The average internet user is exposed to an average of 32.2 videos within a month.

 

8.  45% of viewers will stop watching a video after 1 minute.

 

9.  60% by 2 minutes.

 

10.  4 out of 5 users won’t wait and will click away if a video doesn’t load immediately.

 

%

of users will watch your video only if it loads instantly.

 

 

YouTube Video Statistics

 

 

11.  YouTube has over a billion users. This is almost a third of all Internet users. On top of that, Youtube is the second largest search engine on the web.

 

12.  400 hours of video is uploaded to YouTube every single minute.

 

13.  YouTube reaches more 18-34 and 18-49 year-olds than any cable network in the U.S.

 

14. YouTube is the most popular online video property in the United States (March 2018):

 

Most popular online video properties in the US

Source: Statista

 

15.  YouTube users on average watch more than 30 billion hours of video per month.

 

16. And 1 billion hours every day.

 

17.  80% of views on YouTube are from outside of the U.S.

 

 

What percentage of video views on YouTube come from mobile devices?

18. More than 50%!

 

 

19. The average mobile viewing session on YouTube is more than 40 minutes.

 

20. 62% of mobile users discover videos through YouTube.

 

21. 25% of shoppers admitted that they’ve used YouTube to search for a video related to a product they’re considering in-store.

 

22. 16% of videos on YouTube are linked, shared, embedded on Tuesdays between 11am and 1pm.

 

23. 67% of Millennials can find a YouTube video on everything they want to learn.

 

24. 60% of people prefer online video platforms (e.g. YouTube) to live television.

YouTube Video Statistics

Source: Google/comScore custom survey, U.S., January 2016

 

25. In a standard month, 80% of 18 to 49 year olds watch YouTube.

 

26. YouTube time on TV has more than doubled year over year

 

27. YouTube is available in 76 different language versions (this covers 95% of the whole Internet population).

 

28. “How-to” searches are growing 70% year over year on YouTube.

 

29. 78.8% of marketers consider YouTube as the most effective platform for video marketing.

 

Effectiveness of Video Marketing Platforms

Source: eMarketer

 

 

YouTube Ad Stats

 

 

30.  YouTube ads are on the rise. They currently constitute 27% of all online video ad spending in the United States:

 

YouTube Ad Stats - Digital Video Ad Spending Share US

Source: eMarketer

 

31. On top of that 62% of marketers plan to increase their budget even more in 2018.

 

32. Accordingly, YouTube ad revenues are also on the rise:

 

YouTube Net Ad Revenues (US)

YouTube Net Ad Revenues (US)

Source: Statista – U.S. net advertising revenues of YouTube 2015-2018

 

33. YouTube top 10 ads received 539 million views (14 hours watch time) and 3.6 million likes in 2017.

 

34. Between 2017 and 2018 the total number of small and medium-sized businesses advertising on YouTube grew 2x times.

 

35. YouTube mobile advertising receives 62 percent of attention while this figure for TV ads is only 45 percent.

 

Percentage of User Attention

 

  • YouTube Mobile Ads 62%
  • TV Ads 45%

 

36. YouTube mobile ads (paid) have 84 percent more chances to get attention compared to TV ads.

 

37. 73 percent of TV viewers are disappointed by the amount of TV ads. This is not the case with YouTube ads.

 

38. TV viewers multitask more than mobile YouTube viewers during ads:

 

 

YouTube Ad Stats - Viewer multitasking YouTube vs TV

Source: Ipsos/Google Advertising Attention Research

 

 

39. Currently, 95% of YouTube ads are audible and 93% are viewable. The best results are achieved when ads are both audible and viewable.

 

40. 95% of YouTube ads are watched with the sound turned on.

 

 

Facebook Video Statistics

 

 

41. Facebook users generate 8 billion video views per day.

 

42. More than 500 million people watch more than 100 million hours of video every day on Facebook.

 

 

Number of people watching videos on Facebook every day

 

 

 

43. 85% of Facebook video is watched on mute mode.

 

44. Almost half of the pages (47%) don’t post videos on Facebook.

 

45. In a study conducted by LocoWise 12 brands uploaded 46% of all videos on Facebook.

 

46. On average people watch only a third of a video on Facebook.

 

47. 41.3% of pages promote their videos with paid ads on Facebook.

 

48. 80% of users get pissed off and react negatively toward videos (and publishing brands) when sound auto-plays unexpectedly loud.

 

49. Almost half of Facebook users find it easier to watch videos on a smartphone compared to computer.

 

50. One third of users admit that seeing the logo of a favourite brand can get them to stop scrolling and watch the video.

 

51. Every fifth video is now a live broadcast on Facebook.

 

52. Live videos on Facebook get 3x more watching time.

 

 

Mobile Video Marketing Stats & Facts

 

 

53.  Mobile video consumption increases 100% every year.

 

54.  Mobile video views grew 6x faster than desktop views in 2015.

 

55.  Only 18% of users watch video through browsers.

 

56.  48% of mobile users watch video using mobile apps.

 

57.  33% through social media.

 

58.  20% search results.

 

59.  And only 14% through advertising.

 

60.  Mobile video budgets are rapidly rising (18% for 2014 – 2015).

 

61. Mobile shoppers are three times (3x) more likely to view a video compared to desktop shoppers.

 

62. Video now accounts for more than 50% of all mobile traffic and will account for 70% of all mobile traffic by 2021.

 

%

Share of video in mobile traffic 2018

%

Projected share of video in mobile traffic 2021

 

 

Video Marketing and Video Advertising Statistics for Marketers

 

 

63.  Video viewers are 1.7 times more likely to buy a product than non-viewers.

 

64.  80% of users will watch a video and only 20% will read your content in full.

 

65.  Videos tend to increase user’s understanding of product or service by 74%.

 

66.  90% of internet users consider a video about product or service helpful in making a decision.

 

67.  Videos increase landing page conversions up to 80%.

 

68.  Replacing an image with a video on a landing page increases conversions by 12.62%.

 

69.  Marketers using video grow revenue 49% faster than others.

 

70.  82% of marketers confirmed that video marketing had a positive impact on their business.

 

71.  Video within an email doubles or triples the Click-Through Rates (CTR).

 

72.  Video makes Email Marketing Campaigns 51% more effective.

 

73.  Video on the homepage can boost conversion rates by 20% or even more.

 

74.  75% of executives at least once a week watch work-related videos on business websites.

 

75.  65% of them visit the website.

 

76.  And 39% call a vendor after viewing the video.

 

77.  59% of executives prefer to watch video instead of reading text.

 

78.  96% of B2B organizations use video to some extent in their marketing campaigns.

 

79.  73% of them report positive changes in ROI.

 

80.  25% of consumers lose interest in a company if it doesn’t use videos.

 

81.  56% of them believe that if a company has a website, it should have also videos.

 

82.  Usually, the average internet user spends 88% more time on a site with video.

 

83.  Marketers who use video receive 41% more web traffic from search than others.

 

84.  52% of marketing professionals globally consider video as the type of content with the best ROI.

 

85.  64% of consumers prefer visual content over customer service.

 

86.  62% of consumers are more likely to have a negative perception of a brand that published a poor-quality video experience.

 

87.  50% of marketers are shifting budgets from TV to digital video.

 

88.  The word “video” in an email subject line increases open rates by 19%.

 

89.  Boosts CTR by 65%.

 

90.  And reduces unsubscribes by 26%.

 

91.  Explainer videos boost conversion rates by 20%.

 

92.  22% of all U.S. small businesses are planning to post a video within next 12 months.

 

93. 60 seconds of video equal to 1.8 million words according to Forrester researcher Dr. James McQuivey.

 

Video vs Text:

words equal to 60 seconds of video

 

 

Video Advertising Statistics

 

 

94.  35% of total online ad budget is spent on video ads.

 

95.  65% of U.S. marketers consider increasing their mobile video ad budgets.

 

96.  Every month an average internet user watches 16 minutes 49 seconds of video ads.

 

97.  80% of users recall the video ads they have seen in the past 30 days.

 

98.  26% of users will look for additional information after watching a video ad.

 

99.  22% of them will visit the link provided or website mentioned in a video ad.

 

100.  And 12% of users will actually buy the particular product featured in the video ad.

 

101. The probability of making the online sale is 64% higher when your users watch video(s).

 

102.  36% of users trust video ads.

 

103.  At least some sort of action is taken by 46% of users after viewing a video ad.

 

104.  The average CTR of video ads is 1.84%. This is the highest CRT among all digital ad formats.

 

 

 

Social Media Video Statistics

 

 

105.  92% of mobile video consumers share videos with others.

 

106.  15 seconds or shorter videos are shared 37% more often than those between 30 and 60 seconds.

 

107.  Awesome video ads driving excitement increase purchase intent by 97%.

 

108.  And brand awareness by 139%.

 

109.  The most popular form of online video content among all users is comedy at 39%.

 

110.  The second is news at 33%.

 

111.  Followed by music at 31%.

 

112.  Around 100 million hours of video watched every day on Facebook.

 

113.  90% of Twitter video views are on mobile devices.

 

114.  82% of Twitter users watch video content on Twitter.

 

115.  Snapchat users watch 10 billion videos per day.

 

116.  Every month on average 200 million video ads are shown on Instagram.

 

117.  9 out of 10 Instagram shares happen on Facebook.

 

118. 9.3 million live streams happen monthly on Periscope.

 

119. Average daily volume of video on Periscope is 350,000 hours.

 

120. Total number of active Periscope users is around 1.9 million.

 

 

Future of Video Marketing

 

 

121.  It will take over 5,000,000 years to watch every video that crosses global IP networks in a single month in 2020.

 

122.  Internet video to TV grew 50% in 2015. It will continue to grow, increasing 3.6-fold by 2020.

 

123.  79% of all global consumer web traffic will come from video by 2018.

 

124.  In 2020, video will constitute 23.2% of marketing spend, compared to 17.7% in 2015.

 

125.  Mobile video will increase 11x between 2015 and 2020.

 

126.  By 2020, over 75% of global mobile data traffic will be video content.

 

127.  7 trillion video clips will be uploaded in 2020 – 2.5 daily video clips for every person.

 

 

Video Engagement Statistics and Additional Facts On Video Marketing

 

 

128. Shorter videos get higher engagement rates:

 

Video Engagement Statistics - Audience Engagement Graph

Source: Wistia

 

129.  IPad users tend to watch a video for up to 5 minutes long.

 

130.  33% of users watch one hour of video every day on their tablets.

 

131.  An average male spent 40.6 hours watching online videos, double the 19.0 hours a female spent watching online videos in the UK.

 

132. Video on social media generates 1200% more shares than text and images.

 

133. In December 2013 188.2 million Americans watched 52.4 billion online videos (content only) in one month.

 

134.  Real estate listings including a video tend to get 403% more inquiries.

 

135.  42% of videos on UK Newspaper Sites are ads.

 

136.  67% of Millennials can find a YouTube video on everything they want to learn.

 

137.  Vimeo tracks 715 million video views on average per month.

 

Now, after you know all these video marketing facts, are you still asking yourself whether using video marketing is a good idea for your business? 😉

Sources

http://images.forbes.com/forbesinsights/StudyPDFs/Video_in_the_CSuite.pdf

http://www.marketwired.com/press-release/a-minute-of-video-is-worth-18-million-words-according-to-forrester-research-1900666.htm

http://www.reelseo.com/2013-video-marketing-business-survey-trends-report/

http://www.marketingpilgrim.com/2014/12/in-the-next-60-seconds-300-hours-of-video-will-be-uploaded-to-youtube.html

http://expandedramblings.com/index.php/youtube-statistics/

http://www.prnewswire.com/news-releases/animoto-survey-consumers-want-more-video-marketing-on-web-social-and-email-300079377.html

https://techcrunch.com/2016/01/27/facebook-earnings-q4-2015/

https://www.izideo.com/blog/accurate-video-statistics-according-studies/

http://www.cisco.com/c/dam/en/us/solutions/collateral/service-provider/visual-networking-index-vni/complete-white-paper-c11-481360.pdf

https://blog.twitter.com/2015/new-research-twitter-users-love-to-watch-discover-and-engage-with-video

https://www.thinkwithgoogle.com

http://www.businessinsider.com/digital-video-advertising-growth-trends-2014-5

https://vwo.com/blog/replacing-image-video-landing-page-increases-conversions/

http://go.brightcove.com/en-highcostoffree

http://www.insivia.com/50-must-know-stats-about-video-marketing-2016/

http://www.statista.com/statistics/259477/hours-of-video-uploaded-to-youtube-every-minute/

http://www.business2community.com/infographics/23-reasons-to-use-video-marketing-in-2015-infographics-01305360#3fwKvMwlGjdQKQ34.97

http://www.tnsglobal.com/press-release/connected-life-tv-press-release

https://www.recode.net/2016/1/27/11589140/facebook-says-video-is-huge-100-million-hours-per-day-huge

https://www.facebook.com/business/news/updated-features-for-video-ads

https://www.facebook.com/iq/articles/moving-pictures-the-persuasive-power-of-video#

https://www.facebook.com/iq/articles/shifts-for-2020-multisensory-multipliers

https://dustn.tv/social-media-statistics/

comScore

Vidyard

EyeView

Google data, global, Q4 2015

Google-commissioned Nielsen study, Nielsen National Total Media Fusion, U.S., Q4 2015

Google Data, Q1 2014–Q1 2015, U.S.

YouTube Global Internal Data, Global, 2016

How Small Business Owners Manage and Grow Their Businesses

How Small Business Owners Manage and Grow Their Businesses

To become a successful businessman, you have to be ready to go out of your way, make a few compromises and do a ton of research in order to reduce the risk of failure.

Every single piece of advice is welcome and you need all the help you can get during this long and challenging journey. Put simply, when starting out, you have to spend a lot of time, as well as money, all in a bid to make sure that your ambitious business idea will get off on the right foot.

Reaching to the top is easy, but staying there is where the real challenge usually lies.

The same concept applies to business. Setting up a company is one thing. Maintaining and subsequently growing the business is another.

Below you can find some valuable tips that small business owners have pointed out, to help you take advantage of managing and gradually growing your business:

 

Taking proper care of hourly employees

 

If you want to constantly get the best of your team, it is imperative that you always put a smile on their faces.

Hourly workers, in particular, should never be forgotten. This is because they usually tend to work more than their counterparts. They will, therefore, be willing to stay around much longer if you build a nice environment. Investing in the culture of your company is a great idea. Try to keep them satisfied and motivated, by surprising them with small thoughtful gifts.

In the long run, this would improve the overall productivity of the team and it will eventually have a very positive impact on the growth of your business.

 

Mastering the art of hiring the talent

 

As a business person, you need to understand that expanding your current team isn’t always synonymous with hiring additional hourly employees. Making use of experienced consultants is highly recommended. The good thing is that many of these experts are available online and can help you grow your business without going over budget. During the hiring process, you should focus on certain key traits, such as prior documented experience, positive testimonials, and strong communication skills.

Honesty, integrity and helpful customer service are a few additional attributes that you want to search for. All in all, putting together a well-elaborated recruiting plan is essential for finding the right candidates who can help you build a culture of accountability in your business.

 

Constantly avoiding unnecessary expenses

 

From your experience, you will agree that the tax season is a mess. It always brings additional operating costs to any business. You can avoid most of those pains if you take the time and familiarize yourself with the whole system. In that way, you can see whether there are any deductions that you would be eligible for. Then, you can plan your tax bill with great accuracy. This will be very beneficial for your business both in the short and long run.

For that reason, you want to make sure that you keep yourself up to date when it comes to tax-related issues. Furthermore, we would strongly recommend that you invest in an experienced accountant who can protect your company from costly mistakes.

 

Avoiding distractions and consistently working towards the objectives

 

It might be not easy to achieve your business objectives. Just so you know, there are many distractions which can keep you from reaching your goals. Before you start making plans to grow your business, try to identify the various obstacles that you are battling against. Only, then, you will be able to put together a solid and functional long-term plan for your company. On top of that, this will allow you to set realistic objectives and optimize your business management skills.

 

Continuously improving team’s output

 

Focusing on the productivity of your team is another way to grow the business. Cautiously analyze your business operations and then identify what it is that you can do in order to optimize the performance of those who are in your team. This is a long-term investment for your business, as you will offer to your team the necessary space and training in order for them to develop and potentially master their professional competences.

 

Creating sales pages for products and services

 

If you would like to see your online clients complete their purchases with relative ease, then set up a great sales page. Setting up a perfect sales page is surely demanding. The biggest challenge of all is to combine strong design with simplicity and useful information. A client should be able to understand in an easy and straightforward way what value your business brings to their everyday life.

 

Exploring the power of social media

 

It’s no secret that social media plays an integral role both in our private and professional lives. That is something that you should not ignore. Identify the profile of your potential customers and act accordingly.

For example, an online platform such as Linkedin can be a powerful tool for anyone who runs a B2B business. In the same sense, Facebook and Instagram can be great for a B2C client base where a more direct and casual approach is required.

In short, it’s a great idea to put some extra effort on social media outreach as it can be a smart way for your business to enter the market and establish a strong online presence.

 

Related: The Small Business Social Media Cheat Sheet – [INFOGRAPHIC]

 

Conclusion

 

To sum up, it becomes evident that starting a new business is very challenging. Running a business and keeping it successful is even more challenging.

However, with the right plan and hard work you can be sure that your efforts will eventually pay of. It goes without saying that, there are no magic bullets for growth and effective day-to-day management but hopefully the tips mentioned above can help you on some steps you are going to take towards making your business a success.

 

About the author: Anastasios Koutsogiannis is Content Marketing Manager at GenieBelt.

What is the company Annual Return (AR01 Form)?

What is the company Annual Return (AR01 Form)?

What is the Annual Return (AR01)?

 

Filing the annual return is a legal requirement in the UK.

If you are running a company in the UK, you must operate in accordance with the applicable legislation (e.g. Companies Act 2006). There are certain statutory annual requirements that you should comply with including:

  • Filing Annual Returns
  • Self-Assessment Tax Returns
  • Annual Accounts
  • Pay as you Earn (PAYE)
  • Corporation Tax
  • Quarterly VAT Returns

 

Of interest to this article is the annual return (AR01 form, part 24 of the Companies Act 2006).

Notably, from 30th June 2016, the name changed from annual returns to a confirmation statement. Nevertheless, there is no much change in substance. The phrase “annual return” is still widely used (so we will use both terms in this article).

 

The Meaning of Annual Return

 

An annual return is a statement that you file at the Companies House to confirm that the information that they hold about your company is correct.

You must file annual returns at least once every 12 months.

Failing to file the confirmation statement while your company is in operation is a criminal offense and entails serious consequences. So, if you fail to file the confirmation statement within the stipulated time, you may face one of the following actions depending on the case circumstances:

  1. Removal from the position of director of the company;
  2. Prosecution (if you fail to file a confirmation statement at all);
  3. Companies House may strike the company off the register of companies assuming that your company isn’t carrying on business or in operation. If this happens then your company will cease to exist and all its assets will become Crown property.

 

Filing Annual Return/Confirmation Statement

 

Confirmation Statements (Annual Return) should be filed online through the Companies House web filing service or by paper form which may be sent by post. In either case, you will need to fill form CS01 (previously form AR01).

However, the amount of fees is different; you will pay £40 if you file your company’s confirmation statement on paper and £13 if you file electronically. Most people prefer filing the confirmation statements through the online portal. You should note that you cannot use paper form to file confirmation statement for your company if:

  • The company is in the protected online filing scheme (PROOF)
  • You need to file form 363

 

Details that Must be Provided in a Confirmation Statement (Annual Return)

 

  • Company name and number
  • Registered office address
  • Made-up date of the return – date at which all information must be correct
  • Alternative inspection location (SAIL address), if you use one
  • Officers (directors and company secretary)
  • Persons with significant control (PSCs)

 

Responsibility for Filing Annual Return/Confirmation Statements

 

The legal responsibility for filing the confirmation statement (annual return) of a company lies with the directors. If you have a company secretary, you may delegate the responsibility to him or her but always have in mind that you are ultimately liable.

You must ensure that you file at least one confirmation statement every 12 months. However, you may file as many confirmation statements as you wish within the 12 months so long as you give an interval of 24 hours between any two consecutive confirmation statements. If you have just registered your company, you will have to wait for at least 48 hours before filing its first confirmation statement.

Although you are not required to pay more than once in a year even where you opt to file several confirmation statements, companies rarely file more than the mandatory one confirmation statement in a year-probably in the interest of time.

 

The Importance of the Annual Return/Confirmation Statement

 

While filing a confirmation statement is a statutory requirement, it is not meant to merely increase your responsibilities as a director. It serves several important functions including:

  • Keeping your company’s information on the official register up to date;
  • Improving the quality of information on the official register;
  • The fees paid when filing confirmation statements is an important source of revenue for the Companies House which needs money to maintain the register and to offer other services;

 

How does a Confirmation Statement (CS01 Form) Differ from an Annual Return (AR01 Form)

 

As noted above, confirmation statements replaced annual returns. This change took effect on 30th June 2016.

While there is no much difference, the following are worth noting:

Previously, the requirement was to include a full list of shareholders every three years. This is no longer a requirement with the confirmation statement. As a result, you avail the information to the Companies House whenever you want to ensure that your information is up to date and correct.

Moreover, now instead of having to provide a snapshot of your company data annually, you are only required to check and confirm that the information held by the Companies House is accurate and up to date. With the annual return, you were required to file within 28 days from the anniversary of the incorporation of your company. This period is now 14 days.

Finally, there is the introduction of the requirement to provide a list of people with significant control (PSC) at the time of filing your first confirmation statement.

For the official information on confirmation statements, click here.

 

Related: How to Change from Sole Trader to Limited Company?

 

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Why Do Small Businesses Fail: Top 10 Reasons and Best 50 Solutions

Why Do Small Businesses Fail: Top 10 Reasons and Best 50 Solutions

Why do small businesses fail?

 

The sad truth is that most small businesses will fail.

In most countries (including the US and UK), more than half of newly created enterprises fail within the first five years (business failure statistics according to OECD Entrepreneurship at a Glance Report 2016 and Eurostat).

 

EU Business Survival Rate

One, three and five-year survival rates of enterprises in EU (2014) © Eurostat

 

New business failure rates are high.

Small businesses around the world are failing for the same set of reasons, even as you read this article.

We think you’ll agree: that sounds pretty frightening for every (soon-to-be) entrepreneur.

 

Or does it?

 

Well, as it turns out, knowing the major small business failure reasons in advance, or at least sufficiently early, can be life-changing.

 

This in fact can save your new business from failure.

 

And this is exactly the rationale behind this comprehensive article.

 

Here, we outline 10 major small business failure reasons, and provide 50 actionable solutions against potential failure.

 

And the best part?

 

Most of them are ready to implement, starting now!

 

Ready?

 

So, what are the primary causes of business failure and what can you do about them?

 

Let’s dive straight in.

 

Sections:

 

  1. Low Sales
  2. Lack of Experience
  3. Insufficient Capital
  4. Poor Location
  5. Poor Inventory Management
  6. Over-Investment in Fixed Assets
  7. Poor Credit Arrangement Management
  8. Personal Use of Business Funds
  9. Unexpected Growth
  10. Competition

1. Low Sales

 

This is a catch-all for many small business failures.

So what’s the problem?

Pretty straightforward: low sales is probably the shortest way to business failure.

Obviously, there are some reasons behind low sales volume.

Sometimes this can be a poor marketing strategy, not enough spent on advertising, a complicated process for customers to purchase the product, low production rate, and so on.

One of the classic reasons for low sales is not enough funds being allocated to marketing. Too many businesses fail to put sufficient funds to adequately promote their products or services.

Needless to say, to avoid issues of low sales all aspects of marketing and manufacturing will have to be considered.

 

Solution 1.1: Proper planning =  Higher chances.

 

Let’s be honest, most of the sucesfful businesses are built on meticulous planning. Very seldom spontaneous projects turn to profitable businesses.

You’ve probably heard the advice a million times, but proper planning is indeed critical.

This perfectly applies to your sales.

Before acquiring the loan to start your business, it is important to predict the necessary amount of sales needed to sustain the company once the loan becomes due.

A similar planning is also required when you start a business with your own money.

When the projection is made, it is important to tailor everything else to match it (your expected burn rate, marketing, finances, etc.).

Although it is impossible to predict the exact sales volume, it is still wise to be prepared for the worst scenario.

 

Solution 1.2: Reinforce your sales & marketing techniques.

 

Here’s the point:

Attracting enough sales depends on how you are marketing the product or service.

Successful businesses constantly seek to run their marketing at full speed and convert as many leads as possible, often at an increasing pace.

Business milieu rarely forgives any slack. You probably won’t survive if you fall behind.

Yes, it maybe a little sad.

But it’s true.

 

So do not lag behind!

 

Rethink your sales & marketing. Clear them up of all garbage.

Unnecessary stuff slows you down while you barely notice this.

Try to identify the weakest parts of your marketing & sales process, which are holding you back and providing none or very limited results.

Once you know what they are, immediately get rid of them.

You may later substitute those parts with entirely new practices, methods, tactics, and strategies.

 

The whole idea here is to:

1. clear things up;

2. keep testing with existing and new material;

3. leave only those things that bring tangiable results;

4. Repeat 2 and 3.

 

Pro tip: Never stop testing. Try to beat your best methods, tactics, and strategies with the new even more effective ones.

 

 

Solution 1.3: Get maximum sales on each customer (probability of sale as high as 70%!).

 

Here’s the thing.

You probably already know that a new customer costs significantly more than existing customers.

Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.

At the same time, according to Marketing Metrics there is only a 5-20% probability of selling to a new prospect, while chances of selling to an existing customer are between 60-70%.

 

Your existing customers are at least 3 time more likely to buy from you.

 

%

New Customer

%

Existing Customer

 

All you have to do is to take this chance.

We recommend starting with upselling and cross-selling to see if they work for you.

To get off the ground, you can check how other businesses are already using upsell/cross-sell to increase their revenue.

Not grabbing the chance to sell more to your existing customers is missing an opportunity.

 

And opportunities shouldn’t be missed.

 

Remember: lost opportunity harms your business and contributes to failure.

So, it’s important to tap into every opportunity that your existing customer base provides you.

If you already have a client database in place, why not use it to increase sales?

Here are some tips to help you leverage customer data.

 

Solution 1.4: Effective Pricing.

 

Underpricing?

 

Overpricing?

 

Those are questions that haunt many entrepreneurs.

 

Picture this:

The influence of pricing strategy on sales volume is tremendous.

 

Before we go any further, just check this out:

 

 

Impressive?

You bet it is!

 

Pricing is art. Pricing is science.

Right pricing is hard.

 

But one thing’s for sure:

Pricing always deserves a focused approach.

 

The right pricing strategy can enhance sales volumes, laying the foundation for a business that will prosper.

Get it wrong, and you may end up with problems that will drag down everything you’ve built.

So, it’s probably a good idea to review your pricing strategy.

Try out different pricing methods and techniques that are available to you.

Stick to what brings you more profit.

 

Read these articles on pricing and pricing psychology for further guidance:

 

Solution 1.5: Do not squeeze your marketing budget, unnecessarily.

 

Marketing is something everyone wants, but no one wants to pay for.

The key is to approach this issue in a slightly smarter way. Understand this, slashing your marketing budget without good reason means cutting off opportunities.

 

Unnecessary cuts of the marketing budget means cutting off the opportunities. Click To Tweet

 

 

Which is not to say that rationalizing a budget isn’t a good idea. But it’s not the marketing budget that should be cut, it is individual toxic marketing elements that must be out of it.

Those are two entirely different concepts.

 

Solution 1.6: Collect customer feedback and use it to increase sales.

 

This cannot be over-emphasized, since customer feedback is globally accepted as critical for business.

Customer feedback can help you in many ways by providing actionable insights to create a better customer experience. Tangible data from customers can be used to make better business decisions.

If utilized effectively, customer feedback will help increase sales.

Consider this, for a second:

 

  • Dissatisfied customers 4%
  • Customers who do not voice complaints 96%
  • Customers who will never come back 91%

 

Customer feedback is essential.

The constant dialogue with people for whom you have designed all you efforts looks just natural.

If you do not know where to start, try the five easy ways of collecting customer feedback from Salesforce and see how you can increase your sales with the newly acquired data.

 

Solution 1.7: Overdeliver.

 

Overdelivering is a part of the more general concept of exceeding customer expectations.

This is a powerful way of stable sales growth and is backed by human psychology (“happiness = reality – expectations” principle).

 

Happiness = reality – expectations Click To Tweet

 

An incredible experiment has been done on this by Elliot Aronson (University of Minnesota) and is available here if you want to explore this phenomenon further.

 

One thing is pretty clear: people (a.k.a. customers) like it when you exceed their expectations.

 

People (aka customers) like when you exceed their expectations. Click To Tweet

 

This works, and many businesses have successfully proved it. So, when your sales are floundering, try overdelivering.

Here is an excellent guide by Shopify on this topic. Start implementing it right away.

2. Lack of Experience

 

This is a generalization of sorts, but not having the experience of managing the grind of a small business is one of the primary reasons for failure.

Those who have the relevant experience usually understand the daily challenges that a small business faces. More importantly, they are more likely to spot potential trouble in time to make course corrections.

Of the small businesses that succeed, many are run by people with previous business experience (including failed business attempts), whether it was their own venture or assisting someone else with a startup.

 

What it means is this:

The more business experience you have, especially with running the daily operations, the more likely you are to succeed.

 

Which is not to say that you can’t hit the bullseye with your first try.

 

Well, that’s fair enough, but…

 

What specific options are available, for you to start and run a business with no prior experience?

 

Let’s take a closer look.

 

 

Solution 2.1: The easy way – start a business in a field that you already know.

 

This is a no-brainer.

The good business idea is not always something red-hot. So, do not torture yourself trying to come up with a revolutionary business idea.

There are always some business opportunities out there in almost every field (including yours). Most of them are pretty straightforward and time-tested.

You might just pick the one that looks most promising and closely related to your unique experience.

The next step would usually be validating the idea, and once that is done you are ready to initiate the process of setting up your business.

Starting your new business in a field that you are already well versed in will provide you with a nice starting boost and probably a valuable competitive advantage.

If you want to make your life easier and the probability of failure lower, then it is an excellent idea to start a business that suits your expertise.

 

 

Tip:

In case you can’t find a business idea that appropriately matches your experience you can try asking yourself the following simple questions to find one:

  • What is my biggest knowledge that makes me different from others?
  • What skills I have developed that no one or very few people can have?
  • What other experience I have that no one else have?
  • Can I use those experiences to build something special for other people?

 

This may seem elementary at first glance, but it is a powerful technique to understand your unique experiences and discover specific business opportunities that are open to you.

 

Pro tip: Used in conjunction with our Business Idea Ranking Table, this strategy can bring you fantastic results.

(For full guidance on how to use the Business Idea Ranking Table read our Ultimate Guide on How To Start a Business)

 

 

Solution 2.2: Learn as much as possible.

 

If you have already started a business or decided to go with a business idea in an industry that you have no previous experience of, then the best solution might be to study things and learn as you go.

Educate yourself as much as possible. Education has a positive correlation with business success rates.

 

Education has a positive correlation with business success rates. Click To Tweet

 

Research all ins and outs of your particular business field and the industry it’s part of.

Meet as many people as you can and read/listen as much as you can about the industry to have a broad understanding of the field and get up to speed quickly.

Apart from industry-specific insight, you also need general business knowledge to compensate for the lack of experience.

As a quick yet effective solution, we recommend reading the Personal MBA by Josh Kaufman.

 

 

Solution 2.3: Find a mentor.

 

A good mentor is an invaluable asset in business. Even the most successful entrepreneurs have had a mentor.

You might do as well.

Try to find a mentor for free on SCORE (US) or Mentorsme (UK). Alternatively, contact your local small business organizations for mentoring if your business is located elsewhere.

 

SCORE - Free Small Business Advice

SCORE is a non-profit organization dedicated to helping small businesses through education and mentorship.

.

3. Insufficient Capital

 

Believe it or not, but…

Perhaps the most common mistake that people make when starting up their small business is not having enough money on hand.

All too often, the money used to start the business does not last long enough for the company to make any profit.

This is particularly true when a large loan is used to get the business started.

With no/poor business planning/management it’s easy to run out of cash before the business starts bringing in enough revenue to keep it alive.

When a business runs out of cash, it rarely survives.

 

Solution 3.1: Get at least 25% plus capital before you start.

 

Every small business/startup ought to have sufficient capital to get the business through the first six months, and often longer, depending on the overheads that need to be paid.

So, calculate how much you will need to pay over six months (or a year) and add extra 25% for unexpected expenses.

More is better here. Cash is the lifeblood of business.

 

Cash is a lifeblood of business. Click To Tweet

 

 

The larger the capital you have available, the more time your business will have to prove itself and start generating revenue.

 

Solution 3.2: Understand your finances.

 

Seriously, do it now.

If you have already started your business, the sooner you understand your finances the better your off business will be.

Along with sufficient start-up capital, it’s pretty important to know what you are doing.

Depending upon your approach, your capital may drain away quickly or last longer.

Master this part, starting today.

Reading the Personal MBA by Josh Kaufman, the business book we have mentioned above should be a good way to start. The book has a chapter dedicated to Finance, which outlines the finance fundamentals quite comprehensively. You can just start right away with that.

Understanding the basics of finance before you actually start a business is essential.

It’s often not too late to catch up when you already have an operating business and it has not failed yet.

 

It is material to understand the basics of finance before you start a business. Click To Tweet

 

 

Solution 3.3: Watch your burn rate.

 

To get the most out of your available capital, it’s important to watch your burn rate.

Reliable and right accounting helps to effectively manage your finances and directly influences your use of funds.

The key is to reach a balanced rate of spending, according to a research paper titled “Startup Survival and a Balanced Burn Rate”, co-authored by Wharton marketing professor Ron Berman and Pablo Hernandez.

To dig even deeper and get your burn rate balanced we recommend reading this.

 

Solution 3.4: Establish reliable accounting (bookkeeping) system.

 

Reliable and right accounting helps to effectively manage your finances and directly influences the usage of your funds.

No doubt about it.

Handling the accounting (bookkeeping) on your own (even for the first few months) might look like a great cost-saving idea, but it rarely is.

We believe that accounting (bookkeeping) can properly be managed only by professional accountants/bookkeepers.

Depending on your circumstances, you might hire an in-house accountant or outsource this. The point is, the accounting part of business needs to be consciously delegated.

With professionally managed accounting (bookkeeping), in the long run you’ll save time and money, and prevent ulcers.

Even more, you’ll make sure that finances flow in and out in a structured and transparent manner.

This is absolutely vital to help you make the right decisions.

For even more flawless accounting you can use accounting software.

Below are some, check them out:

Wave Accounting
QuickBooks Accounting Software
Xero Accounting Features
FreshBooks Cloud Accounting

 

Solution 3.5: Avoid bad and unfamiliar financial mechanisms.

 

Financial mechanisms look attractive. They lure business owners and seem to be a good option to solve any capital related troubles.

However, not all of them are innocuous.

Any money that has been provided in the form of a loan inevitably turns to debt.

The debt coupled with disadvantageous conditions may easily lead to disaster.

Bad and/or poorly arranged financial mechanisms must be avoided by all means.

The best solution is to refrain from the use of any financial mechanism unless you are 100% sure of what you are letting yourself in for.

 

4. Poor Location

 

Let’s face it.

Although this is not about all types of business, location is often something that makes or breaks your business.

 

Location is often something that makes or breaks your business. Click To Tweet

 

 

It’s all about the location, especially when your business caters to local customers.

You may have noticed that the good locations cost considerably more than out-of-the-way areas in your community.

This requires careful research on your part when it comes to choosing the right place for your business.

Prime real estate is expensive as it’s a key driver of foot traffic and sales.

If you have already chosen a not-so-good location or simply can’t afford a good one, then try to compensate for this weakness by adopting appropriate actions.

 

Solution 4.1: Choose the right location from the outset.

 

When choosing the location for your new business pay attention to the following factors:

  • Rental Cost
  • Foot Traffic
  • Convenience
  • Crime Rate in Neighborhood
  • Target Consumer

 

You need to be where your best customers can find you.

This means having an easily accessible location even during rush hour.

Plus, an area that generates a good amount of foot traffic and is considered safe by the public.

Falling in love with a particular place is easy. But do not get fooled by your emotions.

Ignoring the real world may lead to subsequent financial loss.

To avoid this scenario, we suggest using the simple ranking table.

People often overlook the power of ranking tables, whereas they are highly reliable bias filters. 🙂

Below is the very basic ranking table that you can use for the purpose of finding the best available location for your business:

 

Business Location Ranking Table

 

While using the table, it is mandatory to base your numbers on hard facts only.

Ignore your unfounded inner voice/opinion.

The solid facts and numbers are real.

Anything else that has no reasonable grounds is often just plain illusion.

Illusions do not interact with the real world.

 

Pro tip: To achieve the best results you can slightly modify the ranking table by including additional industry-specific criteria and/or sub-criteria.

 

 

Solution 4.2: Go online.

 

In a modern world online by default means great location. Having an awesome website/online presence in addition to your physical location is a beautiful thing.

 

Awesome online presence in addition to your physical business location is a beautiful thing. Click To Tweet

 

 

With each coming year, online matters more than anything that mattered before.

If your business suffers from poor location, going online can save you from probable failure.

Try to compensate (or complement) the drawbacks of your location with available online opportunities.

 

Want to know the best part?

Although there are currently well over 1 billion websites worldwide, small businesses still do not seem to take full advantage of this. According to a survey by Clutch, nearly half of small businesses in the US do not have a website!

Another research by Godaddy & Redshift Research shows that in Australia, Brazil, Canada, India, Turkey, United Kingdom, and United States 59% of small businesses don’t have a website. We assume that this number is somewhat equal or even higher in other countries.

Obviously, small businesses around the world aren’t fully utilizing the internet.

 

 Survey question: Does your company have a website?

  • Yes, since 2014 or earlier 41%
  • Yes, since 2015 13%
  • No, but plan to in 2016 17%
  • No, but likely in 2017 or later 7%
  • No, unlikely in future 12%
  • No, neither likely nor unlikely in future 10%

Data source: Clutch

Some of the respondents are your competitors.

Needless to say, even a basic website means a quick win over at least part of your competition.

The best thing you can do today is to create a website (if you still do not have one). The rest will follow.

Just make sure that you constantly keep working on your website/online presence and that you devote the time, effort and budget for this to start bringing results.

 

Solution 4.3: Maximize your signage.

 

According to International Sign Association – Your sign is your voice on the street.

Just imagine:

The powerful marketing tool working for you 24 hours a day, 7 days a week, 365 days a year.

 

Did you know that…

Only 1% of first-time customers come in because of your TV ad and 50% come in because of your sign?

 First-time customers coming in because of:

 

 

%

Sign

%

Word of mouth

%

Newspaper, Yellow Pages & Radio

%

TV ad

 

The number of exposures that a good signage can bring is insane.

What we also like about the signage is the durability. A one-time investment made in a proper signage that requires no further effort from your side can deliver years of non-stop marketing.

Do not underestimate the power of signage. Get the most out of it.

 

 

Create your signage based on the following:

  1. Compelling color
  2. Contrast for readability
  3. Size

 

 

For further guidance on signage and its economic value, see ISA and a handbook on how on-premise signs help small businesses tap into a hidden profit center by New York Small Business Development Center.

 

Solution 4.4: Understand if your location is indeed bad.

 

Sometimes, when your business is not performing well enough, you might see the location as the number one reason.

However, this might be a hasty conclusion.

Before making this kind of verdict, reanalyze your business performance.

First, try to push harder with your marketing channels and other available options to improve the business results.

Try to clear things up and see if your location is actually what is holding you back.

Nine times out of ten you will realize that there are untapped opportunities that you did not use previously.

It’s helpful to get customer feedback while running your marketing at full speed. Survey your existing clients to get to know what they think about your location.

In case it becomes apparent that your business location is doubtlessly wrong and there is nothing you can do about it – move to the Solution 4.5.

 

Solution 4.5: Change your location.

 

Sometimes, the business location is chosen so badly that spending extra energy on it makes no sense. So, if none of the methods listed above improve your business results – change your location.

Do not throw good money after bad, and do avoid a widespread escalation of commitment pattern.

5. Poor Inventory Management

 

Let us be brutally frank:

Too many businesses either overstock on products that do not sell or do not have the products that are selling.

The good news is, thanks to new methods of inventory management, you can significantly improve your systems and keep track of what you sell virtually in real time.

So let’s get down to it.

 

Solution 5.1: Set up your inventory tracking system at the outsetfrom the start, and check it daily to see what is moving and what isn’t.

 

By taking a few minutes out of your day to keep track of the inventory, you can increase your sales and stop wasting money on stocking items that sit on the shelves.

The successful businesses take inventory management seriously.

A properly set up and regularly monitored inventory management system positively influences the business.

Being systematic is important to ensure that the process is uninterrupted and under constant control.

 

Solution 5.2: Test and improve.

 

Even if you have some inventory management system in place, it’s still a requirement to maximize its efficiency by researching and testing new methods continually.

Some approaches may seem good at first glance, but they won’t necessarily work for you.

So, you basically need to try things out to see how they work for your business.

Find something that seems a likely fit, stick to it and keep improving it on a constant basis.

Once it has proved to be successful, try to automate the whole inventory management process.

To start, you can check these 3 popular inventory management techniques explained by Fishbowl:

 

 

…and this infographic from Tradegecko:

 

Inventory Management Techniques

 

Solution 5.3: Automate.

 

Once the successful systems have been created, try to automate them as much as possible.

This will provide you with many added benefits including speed, real-time analytics, low costs and fewer manual errors.

Automation can be successfully achieved with inventory management software, so let’s move to the next solution.

 

Solution 5.4: Use inventory management software.

 

Consider using inventory management software for automation, higher performance and faster growth.

If chosen carefully and correctly, good inventory management software can help you in many different ways including saving time, selling more and providing better control over the whole process.

There are many online inventory management solutions out there. Choosing the right one is again a matter of testing.

To start, you can check these online solutions to see if they work for you:

Tradegecko
Unleashed
Megaventory

Solution 5.5: Hire inventory control personnel.

 

If your business is too dependent on inventory management, then it can be a good idea to experiment with hiring specialized inventory control personnel.

This might look like an unnecessary cost at first glance, but investing in your inventory management team may prove itself in the long run.

 

Solution 5.6: Make inventory checks more frequent.

 

When you experience difficulties with inventory management, then it makes sense to make inventory checks more frequent.

This will help you to anticipate and detect problems faster and cure them accordingly.

6. Over-Investment in Fixed Assets

 

By investing too much in fixed assets, you lack the flexibility to make the necessary changes as your company grows.

Fixed assets need to be rigorously researched in terms of what is necessary to invest in and not spend anything more so that you do not overcommit.

There are many aspects of running a business that require having the funds available to make necessary changes. Putting too much into fixed assets compromises your control over your finances and exposes you to greater risk.

 

Solution 6.1: Understand your objectives.

 

Investment in fixed assets should be laser focused on your business goals.

Unnecessary purchases are not something that a truly promising business should tolerate.

Invest in a fixed asset only after you fully understand your objectives.

Make sure you have this matter covered in your business plan (this involves an in-depth research on the topic before you make the actual investment).

 

Solution 6.2: Get (expert) advice.

 

Refer this question to your business mentor if you have one, or alternatively try to speak to someone with practical industry experience.

In the real business world, lots of things cannot reasonably be foreseen or predicted before you actually dive in.

That is where people with relevant experience can help. They can provide you with helpful insights on industry-specific fixed assets.

It’s very easy and typical for a small business to fail for this reason. Thus, the external point of view on fixed assets is often critical for building a successful business. If done right this will save you from failure or at least mitigate the business failure risks.

Generally, the value of unbiased business advice is often discounted by business owners.

It’s a fact that you never know what kind of information you’ll get from others until you go and ask them.

Just take this as some sort of competitive advantage.

Go and ask what people know and think. Then simply use the information you get for the benefit of your business.

 

Pro tip: Filter any information you get from people, including your highly-trusted sources. Always distil the information through your innate common sense, intelligence, knowledge, and personal experience.

The business and industry knowledge that you’ve possibly managed to acquire already comes to your help here.

If have no proper or prior knowledge, then refer to the solutions provided in the first section of this article (Lack of Experience).

 

Pro tip 2: Do not limit your sources only to people you know in real life. Leverage the power of online communities. Ask questions on Reddit and Quora and get to know what a broader audience thinks.

 

Remember to be highly specific to get the useful feedback.

Include as many details as possible in your questions. Broad messages are likely to bring similarly vague and general comments that are usually not helpful.

 

Solution 6.3: Invest in innovative and latter-day assets.

 

Fixed assets can be different.

Time flies, and often the best thing that was out there a month ago, can be already outdated today.

So, try to come up with the most up-to-date, long-lasting, efficient and flexible fixed assets. Along with cost also look for durability, quality, liquidity and other relevant factors. Invest some extra resources now (such as more research and time) to realize long-term benefits.

Consider different alternatives and try to pick the best.

Every right decision you take today keeps saving you pennies in the long run.

The small things tend to accumulate over time.

So, this usually translates into higher winnings with the passage of time.

 

Small things tend to accumulate over time. Click To Tweet

 

Solution 6.4: Invest in liquid fixed assets.

 

You must admit the probability of things going wrong.

At some point, you might want to sell your fixed assets for any reason.

So, it makes sense to invest in the most liquid assets that are available on the market at the time of purchase.

This will make your life a lot easier if something goes wrong, and it can help to redeem your business from potential failure.

 

Solution 6.5: Stick to your business plan

 

A clear-cut business plan shall cover the fixed assets part.

If you don’t have a business plan, then read our article on How to Start a Business to write a good one.

Once you have a reliable business plan make sure you actually stick to it.

This will help you to stay within the reasonably defined investment limits.

7. Poor Credit Arrangement Management

 

This can manifest itself in different ways from not qualifying for additional loans, mismanaging funds, or failing to see the higher interest rate associated with poor credit.

For those who are starting up a small business and taking out loans, the interest rate will often be based on credit rating.

A single percentage point adds up to hundreds, if not thousands of dollars in extra expenses that do not go towards helping your business get off the ground.

The credit rating is the backbone of your loan acquisition efforts. It needs to be as strong as possible so that you can get the best interest rates. It helps if you can raise money from other sources to keep your borrowing down to a minimum.

In any event, the arrangement management you apply to your credit will play a significant role in the success of your small business efforts.

 

Solution 7.1: Do not handle credit arrangement on your own.

 

If you are not a financial professional then handling your credit arrangements on your own is not the best idea.

Credit mechanisms can be different and they are often hard to understand or manage.

Therefore, it’s highly recommended to seek advice from an external financial advisor or your mentor before taking any loans.

 

Solution 7.2: Try to avoid credit where possible.

 

Although credit gives you a nice boost, you still have to repay the money.

If you are not sure that you will effectively use the instant access to an increased purchasing power that credit entails, simply do not take it.

Don’t arrange any credit that you do not really need.

Even too much funding can harm your business.

Nine times out of ten you need less money to start your business than you might think.

Don’t make the mistake of borrowing money to fuel your business for the next five or ten years – usually you only really need enough money to make progress this year (plus 25% for unexpected expenses).

In other words, avoid credit where possible!

Building a business without getting involved in any sort of credit may take more time and effort, but running a self-sufficient business that does not need to pay anything out is a beautiful thing.

 

Self-sufficient business that does not need to pay anything out is a beautiful thing Click To Tweet

 

Solution 7.3: Consider other available financial mechanisms/tools.

 

Although the small business loan is probably the safest way of funding your business, there are still a few other financial mechanisms that might work even better.

In case you reasonably need extra capital don’t immediately go for a standard loan. Instead, research the other available funding options and go with something that matches your situation the best.

8. Personal Use of Business Funds

 

Admit it.

Too many business owners are tempted to take money out of their business accounts and spend them for their own use.

Given that the failure rate for small businesses is tied directly to how they spend their money, any of it that goes for personal use is taking away from the bottom line.

Tight management of the funds is crucial, especially in the first year of business. Therefore, there should not be any funds diverted for personal use during this critical time. Once the profits start rolling in and the loans have been paid, then you can reasonably reap the rewards of your efforts.

 

Solution 8.1: Make a clear distinction between you and your business.

 

Your business and you are separate (often physical and legal) entities. So, the funds your business owns is not the money you own unless those funds are duly transferred to you (as to a legitimate business owner).

Although it’s slightly hard to make this distinction when you operate as a sole trader, it is still very important to understand this.

Your business is not you; it just operates for you.

If you mix things up, then chances are that you’ll hinder your business instead of helping it.

So, make a rule to take any money out of your business only when it is financially and strategically justified.

 

Pro tip: On the contrary, throwing too much money into your business for no reason can be another potential mistake. Do not subsidize your business for no solid reason. Avoid investing extra cash to diminish its deficiencies.

Your business must stand on its own feets and become self-sustaining.

Accurate business data is critical in making the necessary improvements.

Too much help may cause subsequent failure.

 

Solution 8.2: Keep separate accounts.

 

Keeping your personal and business accounts separate will help you to not mix things up.

Below is the video by Nina Kaufman explaining why mixing your money is not a good idea:

 

 

Solution 8.3: Follow your procedures.

If you have specific procedures or rules for taking money out of your business – follow them.

Even if there are no penalties for the violation.

In case you do not have any procedures, but feel like it might help you – create them.

No need to make something fancy here. Even the most basic and straightforward procedures/rules may work.

In the end, it’s not the procedure itself but the compliance that matters.

 

Solution 8.4: Make sure all transaction between you and your business are at arms-length.

 

As you have separated your own personality from your business, now all transactions between you as an individual and your business as a business entity must take effect at an arm’s length.

This is important to ensure that the big picture of your business is not irrationally distorted.

 

Solution 8.5: Pay yourself a reasonable salary.

 

Pay yourself a reasonable salary that suits your business position.

Take money out of your business in the form of dividends instead of a salary or vice versa depending on your tax and financial situation.

Make sure that in all cases your salary is rational.

%

Failure rate for the fastest-growing companies in the US

Unexpected growth can destroy your business.

Do not repeat the mistakes made by Starbucks, Krispy Kreme, Pets.comCrumbs Bake Shop, Wise Acre Frozen Treats and others.

While many small business owners would love to have the problem of too many people purchasing their products, it can create the unusual situation of not earning enough money to expand the business to cover the additional demand.

This is particularly true for manufacturing firms that must purchase new equipment and add new space to keep up with the sales.

This is more of a business model issue, in the sense that most planning revolves around projections for a steady growth in sales.

If the demand should spike unexpectedly, it puts the business in the unusual situation of not having enough capital to expand and meet the demand.

 

Solution 9.1: Define if the unexpected growth is temporary or long term.

 

It is best to simply work with what you have as long as possible to see if the spike is temporary or long term before making any decision.

If this is a temporary phase, then the necessary adaptation should also carry an interim character.

You have to be able to return quickly to your previous state without negative consequences.

 

 

Solution 9.2: Get prepared by educating yourself and educating/empowering employees.

 

If it’s clear that the growth is dependable, then you might consider investing more resources to adjust to it on a long-term basis.

Probably the best thing you can do is to educate yourself and your employees about the upcoming changes. This will save you from adverse effects that the adjustment can bring to your business.

Jumping into rapid growth without being well prepared, or even worse without really knowing what exactly you are doing can be fatal.

 

 

Solution 9.3: Go ahead with a growth strategy only.

 

It is highly important to have a clear plan before you enter into a phase of rapid growth. Combine the education part discussed above with creating a detailed strategy, and you’ll be safe in most cases.

 

 

Solution 9.4: Control costs and debt.

 

The riskiest part of unexpected rapid growth is the finances.

You do not want to fail when it comes to costs and debts.

Any financial mistake you make directly affects your cash (and the impact is even greater with higher growth rates).

As you already know, cash is the lifeblood of business.

If finances are poorly managed during the rapid growth phase, the chances are that the business will fail very quickly.

 

 

Solution 9.5: Beware that fast-growing businesses need to be managed much more carefully.

 

Keep in mind that fast-growing business should be managed in a more intense way. Be ready for this.

In case you are not sure that you can make it, simply don’t go for it.

Instead, focus on a slower but stable and safe growth strategy.

10. Competition

 

It can be quite difficult for small businesses that are just starting up to survive against established competition.

The most common failures happen when not enough research is done in the field to see if there is any room for a new business in that industry.

While it is true that several businesses in an industry is indicative of consumer demand, it is also often the case that the established businesses are already handling most, if not all of what customers want.

 

Solution 10.1: Defining the potential to sell.

 

Research is crucial to see if the demand is sufficient for a new business to enter the market.

After all, the key to running a successful business is not the effort to sell a product, but finding a product that sells.

 

Solution 10.2: Finding gaps. 

 

Consider the growth rate and location of the competition to see if there are areas in your community that are not being properly served.

 

Solution 10.3: Accepting the challenge.

 

Calm down and understand that competition is a part of business and it’s up to you to leverage this for your benefit.

Accept the challenge, and this will correctly change your mindset.

 

Solution 10.4: Competition as a part of business plan.

 

Dealing with competition must have been part of your business plan. If so, then stick to it.

However, if you have missed this part during the planning stage, then the first thing you want to do is not to take spontaneous decisions. Instead, research your competition and prepare a solid strategy to overcome it.

Here are a few quick tips to help you with your strategy.

Competition in the context of business planning is a relatively broad topic and obviously out of the scope of this article. For better results, we recommend researching this on an individual basis or simply moving to Solution 10.7.

 

Pro tip: The best way to research your competition is to become a customer. Buy from your competitors to identify their strengths and weaknesses.

 

Solution 10.5: Sharing with competition.

 

Realize there is plenty of business to go around for everyone, even in a saturated market.

While you want more and more of that market share, the fact is that you probably couldn’t handle one hundred percent of it. So be nice and share as long as you get enough to keep going.

This however does not mean that the business should stop competing at any point.

Business is a non-stop growth machine in essence. Once stopped it starts to go down.

 

Business is a non-stop growth machine. Once stopped it starts to go down. Click To Tweet

 

Pro tip: Implement a two-fold approach towards your competition.

  1. Identify the best and the worst things your competition does.
  2. Match this with what your business does.
  3. Adopt the best aspects of your competition that your business lacks and get rid of the worst ones.

If implemented correctly this strategy will help you to double win your competitors.

 

Solution 10.6: Focus on your business.

 

This is an alternative approach to dealing with competition.

The idea behind this is that the more you focus on your competition, the less your focus will be on your own business.

More time spent dealing with competition = less time spent improving your own business.

 

More time spent dealing with competition = less time spent improving your own business. Click To Tweet

 

 

Blackberry’s futile attempt to compete with Apple and Google meanwhile moving in quickly to capture the smartphone market is a good illustration of this formula.

When BlackBerry finally did launch a touchscreen device, it was seen as a poor imitation of the iPhone.

Too much focus on competition laid the ground for Blackberry’s subsequent failure.

In Q1 2009 BlackBerry owned 20.1 % of global smartphone OS market share.

This is how the market shares look as of January 2017:

  • Android 63.99%
  • iOS 32.03%
  • BlackBerry 0.49%
  • Other 3.49%

The universal solution: do not accept failure

 

In the end, anyone who starts up their own business will need to take all the major risks into account to have the best chance of success.

Preparation is one of the keys to success when starting a small business.

While you cannot take everything into account before you begin, by being prepared for the most common reasons of failure, you can improve the chances that your small business will be successful.

By focusing your efforts on running a tight business model, you can avoid many of the pitfalls that cause small businesses to fall apart.

As we see from the research above, all major reasons for new business failure are somehow interconnected, and almost all of them point to the same roots: poor planning, incompetence, lack of persistence.

The success of your small business will ride in large part on the effectiveness of your planning and research, and keeping overheads at levels that allow your products or services to be purchased by the public.

The more work you do before launching your small business, the better chances you have of enjoying success.

The sole reason for business success is the entrepreneurs themselves.

If you refuse to fail, you won’t fail.

As Adeo Ressi (The Founder Institute) puts this into words: there is only one reason why the business fails – it’s when the entrepreneur gives up.

That’s it.

Period.

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The Small Business Social Media Cheat Sheet – [INFOGRAPHIC]

The Small Business Social Media Cheat Sheet – [INFOGRAPHIC]

Small Business Social Media Cheat Sheet - Infographic

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THE SMALL BUSINESS SOCIAL MEDIA CHEAT SHEET

[Transcript]

SOCIAL MEDIA PLATFORMS OVERVIEW

PROS/CONS

 

TWITTER

  • Microblogging service and social network that allows users to send short messages of up to 140 characters called “tweets”.

PROS

  • If you want to quickly get some recognition for your business or brand, there’s no better way than Twitter.

CONS

  • Users growth is stalling, compared to other social networks.

 

FACEBOOK

  • The world’s most popular social network.
  • People use Facebook to connect with high school friends, co-workers, and other people in their network.


PROS

  • Facebook is a very simple and straightforward way to begin driving online sales.

CONS

  • Page owners are subject to the whims of news feed algorithm.
  • Organic reach has fallen dramatically during last few years.
  • It’s now a pay-to-play platform for businesses.

 

YOUTUBE

  • The biggest video-sharing site that reaches millions of users across the globe.
  • YouTube is wholly owned by Google.

PROS

  • One third of all online activity is spent watching video.
  • YouTube is a great platform for small businesses to start getting attention.

CONS

  • Traffic is hard to redirect from YouTube to primary website.
  • Users often prefer to stay on YouTube and watch more videos.

 

Related: 100 Surprising Video Marketing Statistics

 

GOOGLE+

  • Social network owned and operated by Google with profiles, status updates, circles, communities and hangouts.

PROS

  • Easy integration with other Google products.
  • Great way to interact with clients and customers.

CONS

  • Complicated interface and administration.

 

TUMBLR

  • Another large microblogging service.
  • Unlike Twitter, Tumblr has no limits on character count.
  • It allows users to publish text, images, video, and share everything via reblogging.

PROS

  • Great platform for reaching a younger audience.
  • If your business has a relatively young audience, Tumblr is one of the best ways to reach them.

CONS

  • Not everyone is on Tumblr.
  • Limited features for a “blogging platform”.

 

DIGG

  • News aggregator with a curated front page.
  • Users are allowed to recommend news stories, pictures, video and other content that people might be interested in.

PROS

  • Easy to set up.
  • Helps to get a decent amount exposure with right content.

CONS

  • Not designed for customer interaction.
  • Not as important as it used to be before.

 

PINTEREST

  • Social network based on image sharing.
  • Allows users to collect and share all sort of images found on the web.

PROS

  • Images on Pinboards are hyperlinked to their original source.

CONS

  • Pinterest is used primarily by women.

 

INSTAGRAM

  • Photo and video sharing mobile app.
  • Also, available on desktops.

PROS

  • Effective hashtag system.
  • Helps to extend the organic reach.

CONS

  • Doesn’t allow businesses to use clickable links in posts.
  • Limited organic reach.
  • Pay-to-play platform.

 

REDDIT

  • User-generated news links and text posts.
  • Votes promote stories to the front page.

PROS

  • Incredibly simple to use.
  • Effective vote-based ranking system.
  • Diverse, active and engaged audience.

CONS

  • Overflowing with content, making it hard to get above the noise.
  • Content can easily get downvoted and never rank high enough to get the attention.

 

HOW TO BEGIN / LEARN THE LINGO

 

TWITTER

  1. Pick a short handle that is easy to remember and descriptive of you.
  2. Follow other users that are in your niche: influencers, partners, clients and customers. Favorite and retweet their tweets.
  3. Let your current fans and followers know that you are now also on Twitter.
  4. Join the conversations. Talk to people. Build relationships.

LINGO

  • @ Reply: Use this to address a public message to a user.
  • RT Retweet: This indicates a posting is a retweet from another user.
  • DM Direct Message: You can only send a direct message to someone who is following you.
  • # Hashtag: Used to categorize tweets and keeps tweets grouped together.

 

FACEBOOK

  1. You need to have a personal profile to create a Facebook business page.
  2. So, set up a personal profile if you do not have one. Then simply create your business page and start adding your business information (address, contacts, services etc.) and content (photos, videos, upcoming events, and links back to your website).
  3. Join to relevant Facebook groups and be part of the community.

LINGO

  • LIKE: This allows other users to know if you appreciate a particular post.
  • POKE: A way to interact with friends and has flirting connotations. Avoid in business matters.
  • STATUS: A microblogging feature to inform other users of your actions and thoughts.
  • TAG: Marks a photo or video with text to identify a person.

 

YOUTUBE

  1. Before you start with YouTube, decide if it is worth it. Video marketing is a big deal now and it can work for you as well.
  2. Set up your YouTube account. Your account will be linked with other Google products that you are currently using.
  3. Once your first video is live, share it on the other social media platforms.
  4. Network with other YouTube Vloggers and users.

LINGO

  • LIKE: YouTube users have the ability to vote videos up or down with the like or unlike buttons.
  • VIEW: Usually refers to viewer count, which keeps a record of the number of views a video receives.

 

GOOGLE+

  1. Follow Google guidelines and set up your Google+ business profile.
  2. Organize your Google+ page by adding your customers, partners, team members and others to Google+ Circles.
  3. Circles make it easy to interact separately with different groups of people.
  4. Connect your page to your website and verify your ownership.
  5. Add links to your website and your other social media profiles in the links section.
  6. Start sharing content and participating in the community.

LINGO

  • CIRCLE: A categorization system for friends and followers.
  • GREEN: When a post is marked with a green button it is public.
  • BLUE: When a post is marked with a blue button, it is only for people in your circles.
  • HANGOUT: A group video chat feature for users in your circle.

 

TUMBLR

  1. Tumblr requires a bit more work than the other social media sites.
  2. To start just create an account on Tumblr and choose a theme for your profile.
  3. Start posting. Try to use images in your posts. Great images tend to get more reblogs and likes on Tumblr.
  4. You can instantly share your Tumblr posts with your Twitter and Facebook audience.
  5. Follow other blogs and become a part of the community.

LINGO

  • DASH: Short for dashboard, it is the main news feed of Tumblr blogs you follow.
  • HEART: Users can like posts by clicking on the heart below the post in their dash.
  • TAG: Categorization system for posts that allows users to find new blogs.
  • REBLOG: Users can reblog posts they enjoy to their own blog.

 

DIGG

  1. Digg is a social bookmarking site where you can submit links for other users to “digg” them.
  2. Try to create exceptional headlines and submit a high quality content that other Digg members may find valuable and make it go viral.
  3. Post your Digg link to your other social media channels to encourage traffic to the posts.

LINGO

  • DIGG: Thumbs-up — a positive vote — for a story that means you want other people to see it.
  • HOME: The main page of Digg that shows the best stories on Digg.

 

PINTEREST

  1. Pinterest is about setting a strategy. Pin strategically by considering your objectives before you begin.
  2. Install the Pin It button on your website and give every page and blog post a featured image that can be pinned automatically.
  3. Drive traffic to your website by offering free items such as e-books, podcasts and white papers to a pin’s description.
  4. Verify your website in the settings page to get access to the Pinterest Web Analytics feature.

LINGO

  • BOARD: A posting page or area for pinners to post and re-pin images.
  • PIN OR PINNING: The act of posting, uploading or adding a picture to the user’s Pinterest board.
  • RE-PIN or RE-PINNING: The action in which another Pinterest user is interested in a particular image on your board.
  • PINNERS: The collective term for Pinterest users.
  • PIN IT: Allows you to easily pin things you see on websites and blogs.
  • FOLLOW: When you follow someone, their pins show up in your Pinterest home feed.
  • HOME FEED: This is your collection of pins from pinners and boards you follow.

 

INSTAGRAM

  1. Set up for an Instagram account and choose a username that clearly represents your brand.
  2. Add a profile photo, a biography and a link to your website in bio section (the only place where the links are clickable).
  3. Link your account to Facebook and other third-party sharing sites where you have an account.
  4. Use and search tags to connect with your audience.

LINGO

  • @HANDLE: A method of referring to another user within a comment.
  • COMMENT: Feedback on another user’s post.
  • FEED: The stream of images and videos that appear on your homepage.
  • # HASHTAG: Used to categorize your content and make easier to discover you.
  • LIKE: This allows other users to know if you appreciate a particular post.
  • STORIES: Photos and videos in a slideshow format which automatically disappears after 24 hours.

 

REDDIT

  1. Create your Reddit account.
  2. Get involved with the community and subscribe to the relevant subreddits.
  3. Read threads, leave comments, post things you find interesting and start upvoting/downvoting.
  4. Wait for a few weeks/months and try to increase your karma before you start marketing on Reddit.
  5. Post links to your best content only.
  6. Remove unsuccessful postings.

LINGO

 

  • SUBREDDIT – Part/section of Reddit with specific focus on certain topic.
  • KARMA – If people upvote on of your posts you get link-karma, if they upvote one of your comments you get comment-karma. The opposite when they downvote.
  • REDDIQUETTE – rules of Reddit, including rules of a specific subreddit and unwritten guidelines of conduct.
  • REDDITOR – Reddit user

SOCIAL MEDIA AUDIENCE SIZE

TWITTER: 320 MILLION
FACEBOOK: 1,590 MILLION
GOOGLE+: 540 MILLION
YOUTUBE: 1,000 MILLION
TUMBLR: 555 MILLION
DIGG: 8 MILLION
PINTEREST: 100 MILLION
INSTAGRAM: 400 MILLION
REDDIT: 234 MILLION

 

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