How to Be in the Top 5% of Your Industry
My friend, and consummate networker, Joe Polish, is about to show you the one thing you need to do in order to avoid being one of the 80% of new businesses that fail each year.
But more importantly, you’ll also discover the one simple piece of advice you need to follow in the top 5% of your marketplace.
Why 80% Of Businesses Fail… And How You Can Be Sure You Beat The Odds
By Joe Polish
You’ve probably seen that bleak statistic before…. “50% of businesses fail within the first 5 years and 80% within the first 10 years.” A Google search will bring up reports hovering anywhere from 60%-90% fail rate in the first 5-10 years. Whatever the case…there are a lot of businesses that fail. Period. So let’s just make sure you aren’t one of them.
Some people want to blame the poor economy, increased competition, and/or inflation for their failures. But there are plenty of people who have proven that success is possible in spite of these challenges. As I see it, there are three main reasons so many businesses meet with failure…
1. Lack of a good product or service.
2. Lack of good marketing.
3. Lack of buyers.
Your job is to simply not be “lacking” in those three areas and you can beat the odds and be successful… But in reality that’s easier said than done or we wouldn’t be looking at an 80% failure rate would we?
Offer A Good…No A Great…Product Or Service.
Pioneering business leader, Peter Drucker gave the simplest definition, and what he called the primary purpose of business… “To create (and keep) customers.”
One of the major roles of being a successful business owner is to actually learn how to fulfill the needs and wants of your marketplace. Offer a product or service…whether it’s something you conceive or represent…and deliver it so that your customers are so happy with the experience that they buy again and again.
Your job as a business owner is to exceed the expectations that clients have because every customer has expectations. And when you exceed those expectations they will do business with you over and over and over again. That’s how you “keep” those customers.
Marketing…The Producer Of Your Success (Or Failure)
Peter Drucker nailed it again with this quote, “Marketing and innovation produce results, all other business functions are cost.”
But I’m not just talking about throwing money at expensive advertising in hopes that you see a return on your investment or building an “image” or a “brand”. No. I’m talking about effective direct response style marketing. This is the kind of marketing that provides results you can track. If more businesses learned and practiced effective, proven marketing techniques the 80% fail rate would dramatically flip to success.
You rarely see someone go out of business because their prices were too high or because they had too many customers. It’s usually because they don’t have enough customers and they’re pricing themselves too low. Low prices squeeze margins and can render a business incapable of delivering a service or a product that meets or exceeds expectations. A lack of customers and competing by low price are the results of ineffective, uneducated marketing.
Buyers…Finding (And Keeping) Your Place In The Market.
What happens if your marketplace gets too competitive or “dries up?” When people get into the “trap” of major competition or find people no longer buying what it is they’re selling, they need to change their approach and what they offer to fit what the marketplace actually wants. That means keeping your finger on the pulse of your market so that your business and marketing can evolve and you can innovate.
Remember These Four “M’s”…
As a successful, high priced marketer for almost 20 years now, I’ve learned that there’s four things you need in business to be successful. I call them “The Four M’s”…Marketing…Margins…Management…and Model.
Model…Take A Look At The “Blueprint” Of Your Business…
What is your plan for generating revenues? This plan is your “model” or the “skeleton of your success”. Your model is the foundation that holds all of the other working parts. A solid model can lead to the success of your business likewise a weak model may lead to its demise.
Margins…. “I Can’t Believe It’s Not Better”
Don’t forget that you are in a numbers game. Most business owners make that mistake. Do you know your numbers? How much do you actually make on what it is you sell? If you don’t know your margins, you might not be around (in business) long enough to find out.
Marketing…Yes Again…From Packaging To Profits
How do you effectively position, offer and uniquely package your products or services? I already touched on marketing but it’s really so important to the success of a business that it deserves extra attention. Your marketing ultimately determines your paycheck. Get your marketing “dialed in” and you’re already two steps ahead of your competition.
Management…I’m not Talking About People
The word “management” often conjures up ideas of managing a staff, but it doesn’t necessarily mean managing people. Management is simply your ability to keep track of stuff. It can mean your ability to manage your staff, your products, your services, your marketing, your margins, and your profits. When you own a business you are managing everything that relates to making you money every day.
Your Weakest Link…
These four M’s feed into each other and some of them are more critical to the formula of success than others. For example, I have never considered myself a great manager but learned such effective marketing that I was able to make high enough margins and develop a business model where based on those alone, I could do really well.
Prioritize your skills. After all, you could be the best manager in the world but if you have a weak model, poor margins, and your marketing isn’t good, you are still not going to make enough money to survive in business.
Never forget what it is you’re really doing when you have your own business…
Solving Problems For A Profit.
That’s it. There is a lot of “problems” in the world. If you can solve them, you can make a lot of profits. If you don’t know what “problems” you can solve, then find out what people are interested in buying and learn how to deliver them a solution in a confident, profitable manner.
If you do “solve people’s problems” just a little bit better than all of the other competitors out there, not only will you beat the 80% failure rate, but you will most likely be one of the top 5% of your marketplace.
Simply because you are reading this article right now, you are probably already in that category….or very close. After all, I think the reason up to 80% of businesses fail (and this is my opinion) is because most people don’t take the time to learn how to make their business succeed. (So congratulations on being one of those people that do.)
Remember as long as you aren’t “lacking” in the three crucial areas of business, (product/service, marketing and marketplace) and as long as you have a good model, healthy margins, effective marketing, and capable management, you can go out there and “beat the odds”. You can succeed.
[Ed. Note: Joe Polish has been a long-time business success thanks to his study of direct marketing. He's also been a consultant to some of the biggest names in the nutrition supplement and information industries. If you want to learn how to become a master at effective marketing then listen to Joe Polish's free "I Love Marketing" Podcast at www.ilovemarketing.com]