Why The Best Small Business Ideas Fail!
There are many statistics on the number of small businesses that never make it past the first year of trade. I have seen figures as high as 90% quoted! Why do some of the best business ideas fail miserably?
I am sure some are just great idea’s that never quite translate to the consumer. For most it is a simple case of not knowing what they are getting themselves into. Here are five of the biggest blunders that you should watch out for:
1. Limited (or no) capital
Building a profitable small business requires an input of capital and if you ask around I am sure most successful small business owners will say “estimate what you think you need, then multiple by 10!” Don’t forget that it is not just money you will need. Consider time and energy as part of your capital. If you are trying to build a business whilst working full-time or even part-time something will eventually have to give.
2. Lack of commitment and discipline
Many small business owners underestimate the time and commitment needed to achieve success. There is enormous discipline required. You no longer have the structure of a job to go to every day. There is no one to fire you if you don’t turn up for a week. Your time is your own, you must use it wisely. Long lunches and lack of commitment and discipline will crush your business.
3. Not understanding your target market
I cringe when I ask business owners who their target market is and they answer “everyone”. You must identify your target market or you will fail to develop a sales message specific enough to entice anyone!
4. Lack of planning
Plan, plan, plan! It is imperative that you have a comprehensive plan before you even think about that great new business idea. Business plans and marketing plans don’t count if they only exist in your head. Get those idea’s down on paper and use this as your road map to success. Update regularly and be specific in you goals.
5. Manic Marketing
Choose a marketing mix that suits your business. Once again if you have not identified your target market you will struggle to get your marketing mix correct. Monitor your marketing weekly and stick with it! Many businesses throw bits of cash at random marketing efforts without any monitoring. If they don’t get a lead in the first week they decide that particular marketing effort didn’t work and they move on to the next. Give your marketing efforts a fair go before declaring failure.
I could go on and on…. but I won’t. If you are committing any of the above sins then give yourself a stern talking to! Or call me and I will do it for you!
Check out this you tube clip for a great idea that failed! Given the chance I would love to “Live the dream”. Rumour has it that it was nothing to do with lack of planning, apparently the companies founder was doing something a little dodgy and ended up in a bit of trouble.
Melanie Miller
Small Fish Business Coach Gold Coast
www.smallfish.com.au
Anonymous 13-Apr-2011 08:21 PM
If you fail to plan, you plan to fail !
How Do I Implement Incentives For My Team?
Incentive plans are important for Small Business owners. I hear many reasons as to why business owners fear implementing plans for their teams. Reasons such as “I pay them every week, which should be enough of an incentive” make me cringe a little. Yes, you do (or at least I hope you do) pay them each week to perform a set of duties. Providing an incentive may increase their productivity, make them feel valued and increase your profit! It’s a win-win situation for everyone.
There are some important factors to consider when implementing your incentives.
Is it integrated with your business goals?
If your goal is to maintain long-term relationships instead of quick one off sales, then reward for long-term sales. If your plan is to grow your customer base rapidly then an incentive could be based on each new client or customer brought to the business. Use your KPI’s (Key Performance Indicators) to set your goals.
Is it easily measurable?
If your incentive requires a Masters Degree in Finance to figure out it won’t motivate your staff. Make it easily measurable and visible by everyone.
Is it achievable?
An incentive should require a push in effort, if it doesn’t your simply increasing your staff’s wage. The push in effort required should be achievable. Nothing will de-motivate your team as much as a goal so out of reach they will never achieve.
Is it consistent?
If you want your incentive to be successful, set the goal posts early and don’t move them during the incentive. This is another de-motivator for your staff. You can of course pick different KPI’s to focus on each month or quarter. This will allow people who have different strengths or skills to achieve.
Is it payable within a reasonable amount of time?
Keep time spans small, anything more than three months can quickly be forgotten. The larger the time required to achieve the larger the incentive needs to be.
Is it what your staff wants?
If you are offering a voucher to a camping and fishing store to a group of people who never camp and have no interest in fishing will it motivate them? Most likely not! Chose an incentive that appeals to everyone. Cash is always a great motivator but if you don’t want to use cash, then a couple of hours or a day off can be of value to your staff. Be very carefully about offering your own products or services as an incentive. It’s not a great motivator either, unless you’re offering a free Porsche!
Melanie Miller
Small Fish Business Coaching Gold Coast
www.smallfish.com.au
Kris Peksis 09-Feb-2011 03:43 PM
Very well thought out and relevant. I have had experience as an "employer" of both volunteer, paid and commission only and have also been offered incentives as a salesperson, manager and administrative employee. Most people quickly get used to the regular pay level and accept that for a regular level of work. Many people will go over and above what is required but soon become disillusioned and can become bitter when there isn't an incentive or reward to acknowledge the extra effort or result. Volunteers often become choosy about tasks and high achievers move on or lose interest. Low achievers or people who don't feel the urge to strive often don't agree with incentives - they put up a wall in case they look like they failed. You need to be careful about the type of incentives or how they are presented so they aren't belittling (Krispy Creme Donuts uugghhh!) or not of interest.
The greatest way to understand whether it is disinterest, fear or apathy that hold people back from doing things is to gradually up the level of the incentive. Even to myself, I can say can I get a new client by tomorrow for $50?...maybe, bit hard. For $1,000? I will followup a few old leads... For $20,000...easy!!! Done Deal.
Melanie Miller 09-Feb-2011 05:29 PM
Thank you for your feedback Kris.
I agree that the incentive needs to be relevant and yes, Krispy Kremes might not really be appropriate!
I also like your view on low achievers vs high achievers. It is really about finding the right fit for the mix of employees you have. Identifying the disinterest, fear or apathy is a great point!
Thanks again for your insight and feedback!
Anonymous 09-Feb-2011 06:54 PM
Very valuable information.
Incentives are based on such a simple concept.
Being rewarded for your EXTRA effort....and who doesn't like to feel valued and appreciated ?
As an employer you will be able to create a positive and happy work enviroment and I can guarantee not only productivity will increase but positive energy will also increase.
I have recently made a career move based primarily on incentives and have recently met with my new team who are energised and motivated by incentives !
Speaking from an employee point of view, incentives make you want to put in that extra effort , feel appreciated and generally makes you feel like work is worth while.
I totally agree that the incentive and KPI's must be achievable. I have previously over achieved with a global company and received a very generous incentive, only to have the KPI's increased to the point they were completely impossible to achieve. The result ? I become so demotivated I simply gave up and am now employed by someone who understands incentives and appreciates my results.
I have recently met with the team I will be heading up and the first thing we done was share our dreams and goals, both professionally and personally. This was a fabulous opportunity for me to put incentives in place that my team would like to achieve. My team would like to work less hours....time is our most precious commodity.....therefore I am really looking forward to working with my team to achieve our goal and have them spend a few more hours with their family instead of at work !
P.S Incentives work wonders with children too !!
Penny 09-Feb-2011 10:41 PM
Excellent Blog and so very important!
Incentives are a win win for an employer and employee. An effective system of incentives can help, persuade staff to join your business, retain existing staff, increase staff motivation morale and loyalty, boost productivity, link individual and business performance, focus employees on achieving targets and also build teamwork (I could go on forever). Perks and incentives can form an attractive element of an employment package too!
The Rules for the Paperless Office
There is no doubt Email has made our lives easier. No more pens, paper, stamps and envelopes. With this ease comes some common mistakes that can easily be avoided.
Who am I?
Once you have built a relationship with someone there is no need to be overly formal, however, addressing the email with a simple “Hi Melanie” is a pleasantry that should never be skipped. Skipping it is the email equivalent of yelling “hey you” to someone on the street!
Who are you?
Nothing is more frustrating than an email with no contact details. Make life easy for everyone and set up an automatic signature so your recipient need never go searching for your contact details. If your recipient is an anything like me (i.e. has a five second attention span) they may never bother to go looking for your details.
If you wouldn’t say it to my face, then don’t send it in an email.
It’s easy to be ballsy in an email. You can vent without having to confront the recipient, just remember; if you wouldn’t say it to someone’s face then its best not to put it in an email. Emails can be printed and forwarded. I have seen a nasty email argument between two co-workers spread like wild fire when it was forwarded to more than 100 employees by mistake. No one needs their dirty laundry aired to the masses!
Spell check, spell check spell check!
Emails between friends or family can be as casual as you like, but in a business context they should read no differently to a written letter. Spell check is there for a reason, use it but remember that its not fool proof. If you are over the age of 16 and still using ” text speak” in your emails its time to stop. LOL, BTW, CUL8TR....
What does your email address say about you?
Keep it clean and keep it simple! I once received a job application via email where the applicants email address was “hot” and a slang word used to describe female genitalia – I will leave it up to your imagination. It didn’t give a great first impression, and in case you were wondering she did not get the job! In a business context, an email address with your business name behind the @ is a lot more professional than using gmail, yahoo, hotmail or any of the other freebie accounts.
Eg. melanie.miller@smallfish.com.au
Do you really want to “Reply to all”?
Use the reply to all option with caution. Is your reply really relevant to all of the original recipients?
I know of a company director who sent out an email to her team of employees outlining some basic company policies that were not being adhered to. One of her not so loyal team members hit the “Reply to all” button sending a rather unflattering description of the boss to not only all of her colleagues but also to her boss. She now flips burgers for a living, or so I have heard!
Using Caps lock
Did you know that using capitals in an email is like YELLING AT SOMEONE? If you need particular text to stand out italics or bold is more appropriate, unless of course you do really want to yell – before you do read my third point again!
Melanie Miller
Small Fish Business Coaching Runaway Bay, QLD
www.smallfish.com.au
Rebecca Little 02-Dec-2010 04:55 PM
Thank you Melanie for another insightful post. I really enjoy reading your posts, they are always relevant, memorable and amusing.
What Happens When You Put an iPhone in A Blender?
If you thought social media marketing was nothing but a big old time sucker then you need to watch this You Tube clip.
Blendtec needed a way to prove that its fancy expensive blenders were worth the investment. How did they do it? They took to You Tube with videos featuring everything from an iPhone to a Nike shoe chucked into a Blendtec blender.
Its viral marketing gone crazy! 9 million people have watched a phone being blended. Now that is a whole lot of free publicity.
I am off now to go order my Blendtec blender. If it can pulverize a shoe, imagine what it will do with some mangoes, ice and a little rum!
Melanie Miller
Small Fish Business Coaching
www.smallfish.com.au
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Girl Power- Forbes 100 Most Influential Women
Lady Gaga wore a dress made entirely of meat to the VMA’s this year. Now I am partial to a little bit of cow between buns smothered in cheese but you won’t catch me sporting a cheese burger dress anytime soon. Should we be surprised that the meat frock-wearing lady of music ranked higher on Forbes list of the Top 100 most influential women than our own Prime Minister?
Julia Gillard came in at 58th position and Gail Kelly, the Chief Executive of Westpac ranked at 8th position. It was great to see some Aussies on the list but we were well outnumbered by the Americans once again.
How do Forbes decide who is powerful? There are four categories; business, politics, media and lifestyle. Rankings take into consideration a “dollar” component and a “buzz” component.
Its interesting that social media plays a part in the decision process. Google hits, Facebook fans and Twitter followers all contribute to the “buzz” component. Yet another example of the growing power of Social Media in our lives.
Melanie Miller
Small Fish Business Coaching
www.smallfish.com.au
Anonymous 13-Oct-2010 11:19 AM
Quite frankly, I am mortified that Lady Gaga rates at Number 7 ....... what is the world coming to ? I'm calling Oprah !
Help! I Have A Pea Stuck Up My Nose!
Yes, this actually happened. I once had a staff member shove a pea up his nose. While this was incredibly funny to me, it was not to him. He was convinced the pea would be sucked up into his brain causing him some sort of permanent damage. Now, I am no doctor but I am sure that it would be highly unlikely for a nasally ingested pea to travel to the brain.
After the offending pea had been snorted out it occurred to me that there should not have been enough time in the day to be poking produce in strange places. This was my failing as a manager. From that day on I had a prepared list of things to do when there was nothing to do. Do you have a list for your employees? Here are some suggestions.
Be nice to your customers
Call your customer base to check details are correct and to see how your product or service is suiting them. Encourage feedback, listen carefully then take some time to address any issues. Put simply, it’s a nice thing to do! You may even get a sale or two out of it.
Check your inventory
If you hold stock you should be doing this at least once a year at the very least. In quite times check out what you have and what may need to be moved out. If you do have slow moving items, develop a plan to move it out and mostly importantly, put that plan in action. Sitting on old stock is costly!
Organise
Get that massive abyss, also known as a filing cabinet, sorted. The same goes for desks, cupboards and storage areas.
Clean
I noticed a dust bunny the size of a feral cat in a store window last week. The staff were playing on their iPhones, which I am sure was not work related. I wanted to drop the “time to lean, time to clean” line but realised that would indicate that I was morphing into my mother. Don’t forget the stinky lunchroom fridge (also a hiding spot for snortable peas).
Melanie Miller
Small Fish Business Coaching
www.smallfish.com.au
Suzanne Bolte 23-Sep-2010 01:17 PM
Great article Melaine.
Unfortunately employee's seem to be programed this way and especially don't think this far, but now I have this list, my employee will not be able to get away with any slackness or iPhone use.
Natalie Alaimo 07-Oct-2010 07:09 AM
OMG a pea really? How funny. However you are very correct. When we had our printing business certain people (me included) could always find something to do, whether it be organising a newsletter, calling customers etc, however some of our staff didn't seem to know what to do when their main job function wasn't available. Having a check list of things to do when not busy was a great way to ensure things keep moving.
I especially agree with calling your clients, sending them an email or a card. Just get back in touch with them, or if I had staff now, I would get them to search and monitor Facebook or Twitter and grow that part of our marketing plan, but that's just me of course!
Are You A Master at the Art of Time Suckage?
It’s a quirky little phrase stolen from the early 90’s Gen-X cult movie Reality Bites. It describes those people around us who manage to waste hours accomplishing nothing. I am sure we are all guilty of it but how do we avoid it?
Here are my top five time wastes. Are you guilty of any of these?
1. Email
Constantly checking your email and replying immediately may make you appear super efficient but it sucks time. Allocate “email checking” times and stick to them. Avoid conducting email conversation, that’s what the other time wasting device called a phone is for.
2. Staff interruptions
Do your staff constantly interrupt you? Easy solution; shut the door to your office. It really is that easy! Put a “Keep out or else” sign up if you have to. If you don’t have an office door, wear earmuffs. Yes, you will look stupid, but you will get stuff done!
3. TwitFace
Are you a TwitFace? You know what I am talking about; a constant Twitter and Facebooker? No one needs to know (or cares) what you are doing every five minutes. Regular updates are great for keeping everyone in the loop but unless you are single handedly saving the world, once a day should do it.
4. Ringing phones
Mobile phones have a fancy little button that not many people use anymore; it’s called the “off” button. If it’s too painful to turn if off then switch it to silent. Remember when mobile phones didn’t exist, people were happy (and possibly more productive).
5. Desktop Disaster Zone
I will admit to having a desktop that looks like small ferrets have ravaged through it. I tell myself that I like it this way as everything is in reaching distance. The truth is that I suck 20 minutes out of my day foraging for things. My nana use to say “cluttered space, cluttered mind”. I have a feeling she may have been correct.
Melanie Miller
Small Fish Business Coaching
www.smallfish.com.au
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To Sell A Fish, You Need to Think Like A Fish!
I have just re-read a fantastic book called Lovemarks written by Kevin Roberts, CEO of Saatchi & Saatchi. It is one of my favorite reads as it takes the focus back to building long -term connections with consumers.
One of my favorite quotes is “To sell to a fish you need to think like a fish”. It’s a simple but powerful concept of thinking like your customer in order to sell to them. One of the easiest ways to do this is to ask for feedback.
Don’t be offended when you get feedback that you don’t like, consider it an opportunity to open discussion or to address an issue. Sometimes a simple explanation of why you do things the way you do will allow your customer to feel heard. I am not suggesting you make changes dependent on every piece of feedback, as that would no doubt drive you a little nutty! Acknowledgement is the key!
Next time a customer voices an opinion think about the way you address the issue. If you do it in the right way you just might find you learn something new, find room for adjustments in your business and win the loyalty of a customer.
Melanie Miller
Small Fish Business Coaching
www.smallfish.com.au
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When Marketing Campaigns Go Bad!
I promise it will make you laugh!
These are just a few of the most famous marketing blunders. It’s interesting to see that even the worlds largest companies don’t always get it right!
1. “Nothing sucks like an Electrolux” was used by the Scandinavian vacuum manufacture to promote their product in the U.S.A. Perhaps an understanding of American slang may have saved this one?
2. Coors marketing campaign used the slogan “Turn it Loose”, when translated into Spanish it unfortunately was read as “Suffer from Diarrhoea” A valuable lesson in translating slogans before they hit the market!
3. Pepsi had a great marketing campaign based around the slogan “Come alive with the Pepsi Generation”. Sounds fun doesn’t it? That is unless you are in China where the translation read as “Pepsi brings your ancestors back from the grave." Not so fun….
4. Gerber baby food launched their product into the African market using the same packaging as the U.S.A. In theory there was nothing wrong with the cute Caucasian baby used on the packaging until Gerber figured out that companies usually put images of what is inside the jar on the packaging, as many people can’t read. Was it any wonder their “bottled baby” was not a huge hit?
You also will not find Gerber on the shelves of French supermarkets as the name Gerber translates to vomiting in French. Bon appétit!
5. And finally one from personal experience, whilst standing in a well known fast food chain overseas I noticed a sign advertising Chicken Nuggets that read “now made with 100% real chicken." Well what the heck were they made from before?
Don’t be scared now! For every marketing campaign gone badly there are thousands that succeed. Have a chat to your Business Coach to get some great ideas on ways to market your business. Don’t have a business coach? Then get now is the time to get one!
Melanie Miller
Small Fish Business Coaching
www.smallfish.com.au
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