The instant era economy is putting more pressure than ever on startups and small businesses to make fast money.
Whether it’s finding financial backers and raising capital, repaying business loans or the race to replace a lost salary after quitting their 9 to 5, many of today’s hopeful entrepreneurs are banking on overnight success.
The proliferation of online business coaches spruiking the secrets to ‘six figures in six months’ only serves to reinforce a belief that business is easy.
Sorry to burst the proverbial bubble, but… it’s not.
Gaining consumer confidence and building a trusted brand takes time, effort and most importantly, planning.
And it’s the latter where most Australian businesses appear to be coming unstuck.
The Australian Bureau of Statistics has revealed 60% of new businesses are likely to fail or face voluntary liquidation within the first three years of trading.
That’s a pretty grim statistic. And a very harsh reality for more than half of today’s business owners.
According to a recent study by the University of Technology Sydney, the most commonly cited reasons for Australian business failures are financial mismanagement, poor business management, insufficient record-keeping, sales or marketing problems, staffing issues and failure to seek external advice.
These findings were supported by Australian Securities and Investments Commission research that found 44% of insolvent businesses suffered from poor strategic management.
Many of these factors can be attributed to a failure to plan, or inadequate foresight and preparation for what might lie ahead.
Perhaps the immediacy of our new business economy is to blame. An online business can be up and running in an afternoon. An ABN, a DIY website and Facebook page is technically all you need to launch a business. But a lot more is required for it to succeed.
Of course, there are also those business owners who put in months or even years of planning and preparation, but their hard work still doesn’t pay off.
Intuit research estimates Australian small businesses are owed $26-billion in unpaid invoices at any one time, and the average SME is owed $13,200.
That could be disastrous for a startup with no capital, those who are already overcommitted with loan repayments to make, and small businesses with staff and their own bills to pay.
So regardless of how or why they got there, it’s clear a lot of startups are looking for ways to build their business and increase profits quickly, without spending more on marketing.
While greater benefits can be achieved from well planned, strategic investment in business development, there is no harm in creating something from nothing.
Tell your story: A lot of businesses make the same mistake of selling a product or service, instead of selling themselves. Telling your story allows you to showcase your point of difference, and the unique qualities you and your business can bring to the transaction. And there are plenty of free platforms available. Put forward a newsworthy angle to your local newspaper or radio station, pitch your entrepreneurial vision to a business podcast or blog, or consider updating your website to make sure it really tells people your story, not just what you sell. If budget allows, engage a professional copywriter to provide content marketing and blogs so you can drive more traffic to your website and cash in on SEO.
Collaborations: I know, it’s a buzzword. But there is a good reason why. Businesses in almost any industry stand to benefit from well-matched collaborations. Startups and sole traders in niche sectors in particular can reap the rewards of collaborating with businesses that already have an established customer base. While a hand-crafted teddy bear maker might struggle to make a profit alone, collaborating with a florist could instantly increase their sales without any initial outlay, while being mutually beneficial for their new partner. Larger businesses can also use collaboration to introduce their brand to relevant audiences through influencers. Sponsored posts by high profile social media identities can be a big budget venture, but some bloggers, digital publications and other online channels will accept products or services in exchange for a review. Who could you collaborate with to boost your business – and value-add to theirs?
Social Media: If you’re not on social media, now is the time to start. Targeting and engaging the right audience is more complicated than many people realise, which is why social media use is declining among Australian businesses, despite consumer use increasing 10% last year. That leaves a gap in the market, and an opportunity for both online and bricks and mortar businesses to introduce their offerings to a wider audience. Social media requires a strategic approach, with quality content, proactive planning and advertising investment as well as responsiveness and consistency. Achieving the best results means getting this mix right, which is why social media marketing is best left to the professionals. But getting started is free, so why not give it a go? If you already have a social media presence, now is the time to review performance, find areas for improvement, and action them.
Email marketing: Mailing lists are still one of the most effective marketing techniques available to businesses today. Emails allow you to deliver a targeted message direct to the consumer. With the right software you can take advantage of audience segmentation to sort your readers into separate categories and deliver a relevant message to each of them. Studies suggest email can be 40 times more effective than social media at converting leads to sales, and using personalised subject lines results in six times higher transaction rates. Best of all, it doesn’t have to cost anything to start taking names. Building a mailing list can be as simple as inviting customers to write their email address on a form in your store or office. To really ramp up numbers, add a mailing list pop-up to your website, promote it on social media, and consider offering a sign-up incentive such as a free e-book or download.