Mistakes Made by Small Business Owners

Mistakes Made by Small Business Owners

According to the U.S. Small Business Administration, over 80% of small businesses fail* in the first year and 95% fail within the first five years.

That number might be surprisingly high to you, especially considering the commonly-held belief that most businesses fail within the first year.  However, from there the number falls sharply. Only about half of small businesses survive passed the five-year mark, ranging from 45.4% to 51% depending on the year the business was started.

Beyond that, only about one in three small businesses get to the 10-year mark and live to tell the tale.

All this might sound discouraging. But, by identifying the primary causes of small business failure, adjustments can be made to allow you to place the odds in your favor.

Why do Small Businesses Fail?

Based on our experience working with small business owners since 2009 and backed up by statistical data, here are reasons small businesses fail.

Insufficient capital (money). The math just doesn’t work. If you don’t have enough cash to carry you through the first six months or so before the business starts making money, your prospects for success are not good. Consider both business and personal living expenses when determining how much cash you will need for investment in the business (employees, equipment, marketing, etc.) and also be prepared for a “business emergency”, i.e., theft, natural disasters or a similar competitor who sets up within close proximity.   Additionally, you may feel like you cannot afford to give your customers something free or at a discount.  But in reality, you can’t afford not to.

Believing you can do everything yourself. One of the biggest challenges for small business owners is to let go. Let go of the attitude that you must have hands-on control of all aspects of your business. Let go of the belief that only you can make decisions. Concentrate on the most important problems or issues facing your business. Sometimes, you can even tell these owners the problem, and they will recognize that you are right — but continue to make the same mistakes over and over. Let others help you out. Give trusted advisors responsibility and authority.

Failure to clearly define and understand your market, your customers, and your customers’ buying habits. Who are your customers? You should be able to clearly identify them in one or two sentences. How are you going to reach them? Is your product or service seasonal? What will you do in the off-season? How loyal are your potential customers to their current supplier? Do customers keep coming back or do they just purchase from you one time? Does it take a long time to close a sale or are your customers more driven by impulse buying? .

Failure to anticipate or react to competition, technology, or other changes in the marketplace. It is dangerous to assume that what you have done in the past will always work. Challenge the factors that led to your success. Do you still do things the same way despite new market demands and changing times? What is your competition doing differently? What new technology is available? Be open to new ideas like social media (Facebook and Instagram); online tools (website, EZ-texting and Geo-Fencing) and the explosion in the use of smart devices (phones, tablets). Experiment. Those who fail to invest in the new tools to attract and retain customers end up becoming pawns to those who do.

Marketing Mishaps. Business owners often fail to prepare for the marketing needs of a company in terms of capital required, prospect reach and accurate conversion ratio projections. When companies underestimate the total cost of early marketing campaigns, it is often difficult to secure financing or redirect capital from other business departments to make up for the shortfall. Because marketing is a crucial aspect of any early-stage business, it is necessary for companies to ensure they have established realistic budgets for current and future marketing needs..

 In life, you may have forgiving friends and relatives, but entrepreneurship is rarely forgiving. Eventually, everything shows up in the soup. If people don’t like the soup, employees stop working for you, and customers stop doing business with you. And that is why businesses fail”. — Jay Goltz owns five small businesses in Chicago.

 Additional Sources:  Small Business Administration*, Forbes Magazine, Investopedia, Honolulu Magazine

 

 

 

Is Digital Marketing Worth the Investment?

Is Digital Marketing Worth the Investment?

To answer this question, we must first investigate what digital marketing really is and its current impact on businesses today. Digital marketing in and of itself is a tool to use to get the word out so to speak on the who, what, where’s and other basic details of a business. 

Once someone knows the basic details, digital marketing takes their audience quickly to the next level to provide much needed content such as videos, links to social media sites, and updated posts on all that is happening including events and other ways to include the audience in the current business activities, and special sales on products or services offered. 

Often there are opportunities for patrons, customers, and/or consumers to comment on a particular business or give feedback such as star ratings or general suggestions on how the business could be better.  A lot of times this can draw negative attention to the business if complaints are expressed online, however, there are often positive effects as well when happy customers take the time to rate and comment.

Whether or not a business wants to invest in digital marketing is totally at their discretion, but the fact that many people are being forced to face today is that we now live in a very digital world. If a business decides not to participate it does not exempt them from being discussed or even negatively impacted online.

Facebook as we know is not only a business platform and many people on personal Facebook pages are highly expressive on their latest favorite or what they view as a terrible product or service.  A business owner who chooses not to engage online does not help themselves to get new customers or restore their sometimes ruined reputation by a few negative comments made on social media sites.

So, is it worth to invest in digital marketing? The answer to that question is entirely up to you.  Perini & Associates’ consensus? The answer is always: absolutely!

Source: Melissa Batey, perini & associates.

Holding a B.A. in Public Relations from Lipscomb University in Nashville, TN, Melissa began her professional experience at Word Records and McClain Public Relations.  Having supported and represented a wide variety of clients, she enjoys creating special projects, activities, and events to promote and foster relationships between clients and their respective communities.

 

 

Do I really need a PR Firm?

Do I really need a PR Firm?

You’re probably reading this because you asked yourself, why do I need to hire a PR firm? In a world of omnipresent media and constant digital interactions, business owners can find it difficult to justify a regular public relations budget.

The accessibility of social media, easy-to-build websites and channels like YouTube has led some business owners to believe that anyone who knows how to turn on a computer can take over the company’s PR efforts. While anyone can make a social media page and start posting, building good PR is a full-time job. Here are three reasons to consider hiring a professional PR team.

1. Planning

Effective public relations require careful and strategic planning. Consider the difference between taking the family on a Sunday afternoon walk in a park and climbing Everest. One requires almost no preparation, and the other involves a team of professionals to help you scale the mountain. The same is true of public relations. Building a brand, a loyal social media following, or cultivating effective search engine optimization takes time, planning, and endurance.

I once spoke with a man whose online presence earned him an international following and business from around the globe. He had been cultivating his carefully constructed online presence for nine years!

2. Placement

Public relations professionals strategically select the right mediums to deliver the carefully constructed messages that best convey your business to your target audience.  A company should never just make a Facebook page and call it quits. Consider all of the communications mediums available today. PR professionals are trained to evaluate your business’s individual needs and audiences and distribute messages across the right mediums. A local coffee shop might benefit from a thriving social media community while a local mechanic would be better served by a strategically placed billboard. The role of PR professionals is to know your business, your audience, and how to reach them.

3. Relationships

Real relationships are more critical to your business now than they ever have been before. Why? Because consumers have options! The days of one-way advertising are over. Consumers have the greatest fact-finding tool in history in their pocket, and they will use it against you. Have you ever been searching for a restaurant and been deterred because of a bad Yelp review, or decided to boycott a company because of their political leanings? When it comes down to the buying decision, what will distinguish your business from another? Relationship. Reputation. Good PR.

https://www.periniassociates.com/index.php/2018/07/15/a-pr-or-marketing-firm-really/

What’s the Role of Paid Advertising?

What’s the Role of Paid Advertising?

Traditionally, media coverage has been divided into two categories: earned media and paid media. “Earned media” is the free placement of your brand’s message in newspapers, TV, radio, social media, or mentions by influencers. “Paid media” is considered paid advertising.

Earned media is considered ideal because it is free and organic, but the bottom line is that paid advertising helps you sell a product. A downside to that coveted earned media is that, unless you score a mention by an influencer who reaches your target audience, there is no guarantee that the message will reach your audience.   Paid advertising, including social media ads, google ads, and traditional mediums like billboards, radio ads, and flyers can provide information to customers, target your specific audience on the internet, and reinforce a brand message.

If you are still wondering why you should pay to advertise, here are some compelling reasons:

1. Advertising boosts customer retention

Many enterprises thrive on repeat and referral business, and existing customers are the key to both. When existing customers don’t hear from you, they tend to forget you.

2. Advertising helps you to reach new customers

Your market changes constantly and new customers have unique wants and needs. Advertising enables you to keep up with changes in your market.

3. Advertising give you that edge

Advertising gives you an advantage over competitors who have stopped advertising. A troubled economy can be a superb advantage for a marketing-minded business.  Advertising gives you a long-term advantage over competitors who cut back or cancel their advertis­ing. Companies that maintain their advertising during difficult economic times experience more significant sales increases than those who don’t.

4. Advertising reaches your target audience

Much of today’s online advertising reaches your customers based on their reading, listening and viewing habits. Many online advertising mediums allow you to choose specific keywords, demographics, and locations, therefore maximizing your advertising dollar.

5. Advertising builds awareness

Awareness builds familiarity and trust. Brand recognition is created by repeat views. Can you still remember a TV jingle from your childhood? That’s probably brand recognition made from repeat views, even if the product had no relative significance, you could still remember the tune for laundry soap. Consistent and quality advertising can help create a long-term memory. People for­get, and they forget fast. They are bombarded with mes­sages, an estimated 2,700 a day. The more impressions you make, the longer people will remember your ad and your company.

6. Advertising helps customers decide

Many people postpone buying decisions, sometimes going to a store, then researching the product online to find a lower price. Advertising can help you stay fresh in their minds when they’re ready to buy.

When you stop advertising, you shortchange your reputation, reliability and the confidence people have in your company.  Advertising keeps a healthy and positive image of your company. It can even correct misleading gossip and counter­act negative rumors or opinions. Consider Dominos. They were reputed for making lousy pizza, so they launched aggressive advertisements acknowledging their horrible reputation and addressing how they intended to fix it.

Just remember, while it would be ideal never to spend a dime and have an excellent brand reputation, cutting back on advertising can lead to the impression that your business is in trouble. Advertising improves your business’ image. It tells your customers and competitors that your doors are open and ready for business.

Contact us if you are looking for more information about the right paid advertising mediums for your business and budget.

Blog Link: https://www.periniassociates.com/index.php/2018/08/01/what-is-the-role-of-paid-advertising/

 

Why You Need More Than Social Media

With the advent and rapid growth of social media, many small businesses grew to believe that setting up a Facebook page and posting a couple of times a week would suffice for all of their communications needs. Unfortunately, that is not true. Yes, social media is now a staple in modern communications. Both between businesses and between individuals. There are many factors to consider when creating your company’s communications plans.

Demographic Disparity In Social Media

Social media is not one size fits all. Different demographics use different platforms. And, they use those sites in different ways. If you are trying to target a younger audience, setting up the standard Facebook page may not be your best bet. Though, “Facebook remains the most widely used social media platform by a relatively healthy margin: some 68% of U.S. adults are now Facebook users,” according to the Pew research center, younger adults tend toward platforms like Snapchat and Instagram.

 The Credibility of Social Media

With the recent Facebook data scandal, social media consumers may be thinking a little more about how much time they spend on Facebook. It may also affect how companies advertise to consumers on the platform and use data collected from the site. Of course, so far the #deletefacebook movement hasn’t had the radical effects on social media usage people may have thought.  Recommendation: keep an eye on public sentiment changes toward social media in the future.

 Traditional Media

Traditional media has been portrayed as dated.  Also, borderline obsolete for many years.   Primarily since many Americans rely on platforms like Facebook and Twitter for their news. However, with the rampant “fake news” epidemic, studies show that Americans may be turning back to traditional news outlets for their facts. This trend toward trusting conventional news outlets is vital to your small business’ marketing and communications efforts because it means that earned media should still have a place in your plans. That’s right, a good old-fashioned press release or newspaper ad should still be in the budget. However, keep in mind that just because trust for traditional news outlets is growing, that does not mean that social media or mobile consumption of information is decreasing.

 It’s About Building Meaningful Relationships

Social media is a mode of communication, meaning that it should be a two-way street. Effectively using social media for your business requires a give and take. Don’t just post some sales pitches and call it good. Create a conversation, follow people in your field, and engage customers in open discussions about relevant topics.

Creating and maintaining a thriving social media presence is still crucial to your business’ communications efforts. Social media remains a primary mode of building personal relationships between your brand and your customers. Follow Perini & Associates on social media for more information about how to put social media to use for your business (see what we did there?).

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Source: Melissa Stewart, perini & associates.

Starting her career in communications as a military public affairs specialist where she reported on everything from combat operations to life on the base. Since then has earned a degree in strategic communication from Northern Arizona University and an MBA from EDHEC Business School while continuing to work in journalism, public relations, and marketing. Melissa loves being creative and meeting new people.  She has experience in Social Media, Email Marketing Content Creation, Google Ads and Search Engine Optimization (SEO).  She is a free-lance writer for the Pikes Peak Newspapers.

Why You Should Consider Geo-Fencing

Effective marketing requires using multiple channels and approaches to deliver your company message to your target audience. Merely buying a billboard or setting up Google Ad may not be enough to reach your target audience.  Thus, let’s chat about Geo-Fencing.

In a world filled with various technologies, advertisements, and media all vying for our attention, how do you make your message stand out? How do you distinguish your company and your unique message? Over the next few weeks, the experts at Perini & Associates will cover some helpful tips for delivering your company message directly to your audience.

First, let’s cover a technology that is projected to grow at a rate of 27.5% by 2022, geo-fencing.

Geo-fencing utilizes GPS coordinates to deliver targeted, location-based advertising and offerings to mobile phones in a specified area. In a nutshell, it allows you to set up a virtual perimeter of interest to target potential customers. When they (and their mobile devices) enter the boundary you have set, it allows you to send them advertisements, emails, alerts, and the like.Beb

Have you ever had an app open and seen an ad banner? That’s probably an example of geo-fencing. With geo-fencing technologies, mobile devices can serve as a highly targeted and effective ad in the hand of every potential client with a mobile device.

Benefits

Let’s go over some of the benefits of using geo-fencing technologies.

1. Increased sales

Some products or services are location and time sensitive. For example, happy hour specials matter to people leaving work looking for a nearby place to grab a drink.

2. It’s cost-effective

Geo-fencing allows smaller businesses to effectively get their message out to customers in the area, which increases the likelihood of them responding positively to the call to action. Let’s face it, most businesses don’t have the budget to compete with larger companies’ advertising budgets. But geo-fencing could help them attract those in their area.

3. Reach your target audience

Geo-fencing helps you ensure that your ads are reaching people in your predetermined physical sphere of influence, which will enable you to reach audiences who would not have otherwise searched for your business.

4. Reinforce your efforts

Does geo-fencing replace other communications efforts? Certainly now. With geo-fencing, businesses can reinforce their targeted advertising efforts. For example, a small shop could place a traditional billboard ad at a location a mile away from the shop, then set up the geo-fencing technologies to run ads when a potential customer reaches a half-mile radius, reinforcing what the potential customer saw before and increasing the likelihood of brand recognition.

5. Build customer loyalty

Here’s a practical example, if a customer is within your chosen radius at lunchtime, you could send an advertisement to their mobile device and increase your chances of bringing them in for a meal.

Summary

The experts at perini & associates are integrating this rapidly growing technology into their list of products to offer a holistic approach to help your company meet its goals. Follow us on social media for more information about geo-fencing, or call us to learn how you can implement it into your communications plans.

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Source: Melissa Stewart, perini & associates.

Starting her career in communications as a military public affairs specialist where she reported on everything from combat operations to life on the base. Since then has earned a degree in strategic communication from Northern Arizona University and an MBA from EDHEC Business School while continuing to work in journalism, public relations, and marketing. Melissa loves being creative and meeting new people.  She has experience in Social Media, Email Marketing Content Creation, Google Ads and Search Engine Optimization (SEO).  She is a free-lance writer for the Pikes Peak Newspapers.