Top 3 Reasons Small Businesses Struggle, and How to Fix Them (Part 1 of 3) – RSS

This is part 1 of a three-part series designed to help small businesses not just survive, but thrive.

There are over 30 million small businesses in the USA, and it’s estimated that as many as 30% of these have closed, either permanently, partially, or temporarily. Hopefully, since you are reading this, you are one of the survivors.

There are a lot of reasons that small – and large – businesses fail, but could choose just 3 reasons, they would be:

Insufficient market demand

Lack of finances (and specifically, lack of sales)

Labor issues

All three points are inter-related, especially if you accept that insufficient market demand could translate to insufficient marketing and/or sales effectiveness. More effective marketing should lead to more sales, which should equate to more money coming in.

Why do so many small businesses struggle, even without a pandemic to blame?

Perhaps you started up your business to be your own boss, to pursue your passion, or you spotted a niche opportunity… or one that would help you fulfill your retirement goals. The things that drove you to start your business may not align with the skill sets needed to grow a business. Very few people have all the requisite skills to be successful, but even if you do, I can guarantee you don’t have the time to do everything yourself.

So, you need help. And unless you have an equally driven partner (likely your husband/wife, or significant other) you’ll have to hire someone, and pay them. And that’s where the inter-relationship of the three causes of failure begins. Getting effective people costs money. And for a small business, it’s a lot of money.

If marketing isn’t your thing, or you’re too busy covering other critical activities, you may need to hire someone with the appropriate marketing skills. The term ‘appropriate’ is used because marketing is very specialized, and every business is unique in its marketing requirements. Here are some of the more common specialties:

Web design. I think it’s safe to say in today’s world – pandemic or not – every business should have a website. It may be as simple as an electronic postcard or flyer, but you need one. It doesn’t have to be fancy.
Market research. Most useful in a pre-startup phase or when new products or services are introduced. Market researchers try to understand if your product or service will appeal to particular audiences. Product marketing follows market research to roll out the product or service.
Content marketing. Content marketing and video marketing are all about creating content—basically any consumable piece of information—that serves a purpose beyond just promoting a product. Think of it as advertising by offering something that is actually useful to your consumer.
Direct marketing. Simply put, direct marketing involves sending promotional marketing materials directly to consumers. Direct marketing relies on Database marketing to build contact lists.
Social media and Influencer marketing. Social media marketing efforts are focused on driving traffic to a company’s website and boosting overall brand awareness and customer loyalty. Influencer marketing uses known or expert people to get the message out to their followers.

Other marketing specialties include Search Engine Optimization, Guerilla Marketing, and Event Marketing.

Just as broad as the specialized fields of marketing are, if you need or want to hire marketing assistance, the spend range is very broad. You can hire people, use freelance contractors, hire a marketing agency, or use fractional marketing assistance.

Here are some average cost estimates for formal entities. Part-timers, freelancers, or fractional practitioners will be less.

Web design. $100 – $100,000 one-off project

Market research. This one is all over the place and has a ton of variables. Do your research based on your business needs.

Content marketing. $1,500 – $10,000 per month

Direct marketing. $100 – $3,000 per month

Social media marketing. $500 – $3,000 per month
Marketing agencies. $1,800 – $6000 per month

The key is understanding what your business really needs and then finding the right, affordable solution. Most small businesses can succeed with a full-time marketing person. On top of that, the labor market is chaotic at the moment, so for most small businesses, getting part-time or fractional help is a good option for marketing.

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Part 2, “Lack of finances and specifically, lack of sales,” will be published soon, so check back or follow us here at RSS.Consulting.

Van Fleisher

About the Author

Van has worked in over 30 countries helping large companies and small. Author, mentor, board member, CEO, and team leader have been some of his job titles, but his passion is helping businesses succeed through their own employees' efforts.

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