Australia runs on small businesses. According to the Australian Bureau of Statistics (ABS), 97% of all Australian businesses are small businesses with 20 or fewer employees. Small businesses employ more than five million people and contribute over $500 billion to the economy. Small businesses provide services to local communities, drive innovation and create job opportunities.
Despite their benefits for workers and the economy, starting a small business is a notoriously risky endeavour. 20% of small businesses in Australia fail within the first year, while up to 60% fold within five years of launching.
Anchor Digital has helped many purpose-driven businesses grow, and we’ve learned a lot about common small business mistakes. If you’re looking to start a small business that beats the odds, we can significantly improve your chances. You bring business ideas, and we can help you create a compelling brand identity that puts your products in front of the right audience.
Here’s the Anchor Digital guide to the reasons small businesses fail and how the right marketing tips can help your business succeed and grow.
Reasons Why Small Businesses Fail
Starting a small business is difficult even for experienced business owners, but it can be especially challenging for new entrepreneurs. When you’re just starting out, the reasons small businesses fail are much harder to avoid and can really trip you up if you don’t plan for them.
Here are the most common small business mistakes that are likely to derail your success:
Lack of research
A small business can only take off when there’s a market for its products or services. One of the most important first steps you can take is to extensively research your target audience, your competitors and the trends in your industry.
Lack of business plan
A good business plan clarifies the direction of your business, the action plan you need to grow and the financial support you require to get started. Writing your business plan helps you clarify your unique value proposition (UVP): what makes you stand out among your competitors? A UVP identifies the unique features and benefits that would lead someone to choose your business over others and lays out how you can solve your customers’ problems.
Lack of financial management
One of the most common small business mistakes is not staying on top of financial obligations or managing cash flow. Obligations include taxes, lease repayments and employee benefits, and common pitfalls include relying solely on external contractors to manage your money and only talking to your accountant at the end of the financial year. If you’re not making enough money to both keep on top of your financial obligations and make a profit, your business will be in trouble fast.
Ineffective branding
A business’s brand is the core of its identity, which other factors like the logo and colour scheme are based on. A strong brand identity reflects strong values, and the elements of your visual identity flow from that. Without a strong brand identity, your business will struggle to connect meaningfully with the people who would benefit the most from your services.
Poor marketing
A business needs the right marketing to be successful. Instead of just setting up your business and hoping for the best, you need ways to communicate your brand identity. Marketing and positioning strategies like omnichannel marketing and targeted social media campaigns help your business to grow. Without a marketing plan, it’s a lot harder to acquire a regular stream of customers and sales.
Not growing or adapting
Industry trends change, technology innovates, and events in the wider world pose new challenges (COVID-19 is one of the most memorable recent examples). Adapting to new circumstances and pivoting when necessary is essential. If your approach to business is too rigid and inflexible, you’ll lose out to other businesses that adapt to changes.
Lack of online presence
Even if you run a brick-and-mortar store, most of your prospective customers (including in your own city) will be looking for you online. If potential customers can’t find you, they’ll find businesses with a stronger web presence instead.
Marketing Tips to Help Your Small Business Grow
The lack of a compelling marketing strategy is one of the biggest reasons small businesses fail. Yet, creating the right strategy involves more than just avoiding common small business mistakes. Here are some of the most important tips to take on board in order to help your small business grow:
Master the art of listening
There are two sides to the story: what you want to say and what your audience wants to hear. Whatever business you’re in, conduct market research into what your customers want and listen to what they have to say. When you collect relevant information, you can better direct your services and strategies towards meeting customers’ needs.
Research your competitors
Learning from the successes and failures of your rivals helps you understand how your business compares in a competitive marketplace. It helps you to find new markets to tap into and update your marketing plan.
Develop a mobile-friendly website
Even in your own neighbourhood, most people will be looking for you using their mobile devices. Having a fast, responsive, mobile-friendly website is the bare minimum. Without one, you don’t have the tools to attract the right customers.
Create quality content
No matter what kind of business you’re in, you need a search engine optimisation (SEO) strategy to attract the right clientele. SEO draws traffic to your business websites and improves rankings on search engine results pages (SERPs). Brands that blog receive more website visitors than brands that don’t, and helpful content also allows you to demonstrate credibility in your field.
Leverage social media
Social media is an essential part of your marketing strategy that’s also cost-effective and easy to use. With more than half the world’s population on social media, giving this area some serious attention is one of the simplest and most effective ways to find new clients.
Encourage customers to leave positive reviews
Good word of mouth helps your business grow, and sometimes, a large number of five-star reviews are all it takes to attract new customers. Leverage platforms like Google My Business, Facebook and Yelp so people can share their experiences.
Keep Your Business Growing With Anchor
The right digital marketing agency can provide the right marketing, branding and digital solutions to help your business grow. As a hybrid marketing agency, Anchor Digital provides you with all the tools you need to succeed in your industry and outlast your less-prepared competitors. We’ll help you avoid all the common small business mistakes as we help you on the path to lasting success.
Having a strong marketing strategy is essential for success in business. Anchor can help you build your digital marketing strategy from scratch, identifying your unique selling proposition (USP) and collecting data on target demographics. We’ll help you identify what you can do better than your competition. Then, we’ll stay true to your vision for your business as we help you demonstrate what you do best to the world. Our services include collaborative brainstorming sessions, in-depth customer and market research and branding and marketing strategy backed by data and steeped in research.
To find out more, contact the Anchor team.
