Most small businesses fail, it’s true

Most small businesses fail, it’s true

According to the Small Business Administration, 50% of small businesses fail in their first year and 95% fail within their first five years. The Department of Labor has more encouraging statistics, but I think overall it’s safe to say that MANY small businesses fail soon after they start, not to mention the authors, consultants, home business franchisees and others that simply give up on their dreams and return to salaried employment.

After consulting with many entrepreneurs in the last five years, I know why this happens. Promoting and marketing the business, which should be FIRST on the list, is often last or ignored. I used to manage salespeople…I would watch their business go WAY up, and then WAY down, over and over. Why? Once they had built a book of business, they spent their time managing that book, rather than continuing to sell. Business owners do the same thing. I had the great pleasure of spending time with Marilyn Carlson Nelson, the CEO and Chair of Carlson Companies, Inc, a $20 billion dollar company built by her dad. I asked her the secret to their success. You know what she said? “Always be selling!”

I can’t tell you how frustrating it is when an owner won’t take 30 minutes to be interviewed for a story because he has to “paint his office.” (true story) Or how often people tell me they just don’t have a budget for marketing. That’s like saying you have no budget for gas for the car. It’s so sad, but it’s truly why so many small businesses fail. As Ms. Nelson said, we must always be selling. Taking care of our customers is very important but guess what, they will always leave us at some point. We have to keep that pipeline of new opportunities fat and juicy!

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