Brand failures are all too common in the business world. In fact, according to the Small Business Administration, about 50 percent of businesses fail within their first five years.
What can you do to make sure that your brand doesn’t become another statistic? Here are 6 reasons brands fail and how you can avoid them.
1. Lack of Planning
One of the main reasons brands fail is because they don’t have a solid plan in place. Without a plan, it’s difficult to know what you’re doing or where you’re going. You will also have issues knowing your metrics.
Solution: Make a business plan and break down your goals, objectives, and strategies. For example, a goal would be to increase revenue by 50 percent over the next 12 months. An objective might be to add a new product line that generates $100,000 in sales within six months of launch. A strategy could include hiring an additional employee that specializes in e-commerce marketing to sell more products on your website. You should have both short-term and long-term goals for your brand.
2. Bad Marketing Strategies
How are you marketing your brand? The key to success is finding marketing strategies that work for your company. For instance, if you’re in a B2B industry, social media may not be the best way to market yourself because most of your customers won’t have accounts on these sites or will rarely use them.
Solution: Get into the mindset of your target audience to understand them better. Try using different channels like email newsletters or blog posts instead of just relying on Facebook ads alone. Work with an advertising agency specializing in your niche because this team understands marketing nuances.
3. Poor Hiring
Hiring the right people is difficult, but it’s worth taking time to find someone who fits your company culture and shares its values.
Some companies hire based on skills alone. However, if there isn’t a good match for personality or work style, then it may not be successful long term. You need to have chemistry between employees to make sure everyone works together well as part of an effective team.
Solution: Take some time during each interview process where you talk about personal matters rather than just focusing on qualifications and experience level (although these are important too). Have at least three interviews before making any offers to get comfortable with one another.
4. Ineffective Leadership
It’s common for leaders to be so focused on the future that they forget about their team in the present. The best way to build a strong company culture is by showing your employees you care and listening to them when they need help or advice.
Solution: Take some time each week where you check in with each employee over lunch or coffee and then ask how things are going and if there’s anything else needed from management. This will show your employees that you value their opinions as part of a team effort rather than just individual contributors.
5. Tight Finances
Many companies fail because they don’t have enough money to keep going. If you’ve hit a rough patch, then it’s crucial that you do what’s necessary before things get any worse and there are no options left for recovery.
Solution: Work with an accountant or financial professional who can help guide your company through some tough times without having to go out of business altogether. A good way to start is by looking at where most of the expenses come from each month, so those costs can be cut down first.
Don’t forget about inventory management software. These programs will allow businesses to manage their stock levels more effectively, resulting in less waste.
6. Lack of Commitment
You don’t need a successful business overnight. It’s a process that takes time, and most entrepreneurs will tell you there were times when they wanted to quit.
Solution: Set up your goals to achieve them within three years or less. It keeps things realistic for both yourself and others involved with the company.
Have an exit strategy in place should something unforeseen happen like bankruptcy filings due to unexpected debt loads from creditors demanding payment immediately. If any of these scenarios occur before reaching profitability, then consider selling off all assets except cash reserves (if available) until you can raise enough money.
Companies fail for many reasons. However, you’ll be in a much better position to succeed by avoiding some of the most common ones. Use this information as a guide to help your business grow and thrive for years to come.