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Tag Archives: business start ups

What are the Main Reasons Businesses Fail?

One of the main reasons most businesses fail is because of poor management and planning.

It takes more than just an idea and a catchy business name to make a business successful. In addition to a good idea you will need a business plan and some start up capital. Depending on what type of business you are starting, you may need thousands of dollars in start up capital and a ten page business plan. Unfortunately many business start ups don’t have this, and they end up closing within two to three years. Although the owner of the business had good intentions, those good intentions were not enough to pay the bills and attract customers. What these owners lacked were good marketing skills and financial planning.

The recent economic depression really disproved the old saying “If you build it they will come”. Today, before you build anything (including a business); you better make sure that the location you select has the customer base and income to support it.

Too many times a person will a launch business in a neighborhood or community without doing any research. Conducting market research is very important especially for a new business. The research results will reveal if there is a strong potential customer base or if there are competing businesses in the area. Unfortunately many entrepreneurs don’t discover that there is competing business only a few blocks away until after they sign a lease. Had they done their research, they would have known that they needed to launch their business in a different location. Or, had they known that competing businesses were in the area they would have realized that they needed a more innovative and aggressive marketing strategy.

Selecting the wrong location is another major reason many businesses fail.

Before selecting a location for your business, you need to make sure that the area is appealing to the customer base you are trying to attract. If the customers you are trying to attract are upper income people, than the location needs to be visually appealing and have the impression of being safe. This includes making sure that all the areas around your building or retail space is clean and well maintained. It is also important to make sure that the location you select has safe and secure parking, and a well lit parking lot. Otherwise customers will not feel safe patronizing your business or parking their cars.

If you are depending on heavy foot traffic to generate revenue for your business, than your business location should be near a train station or on the bus line. By offering discounted train or bus passes to frequent customers, will help you increase sales and also build customer loyalty.

How Social Advertising Helps New Start ups

I knew that social advertising was becoming very popular in the business community, but I had no idea that people were using social ads to attract financial investors.

I recently found this out after reading a few articles in several financial magazines. One article stated that the number of business start ups using social advertising to attract financial capital had increased by fifteen percent from last year. Some of the reasons given for using this strategy included a more effective way to target the right investors, and also being more effective then participating in a pitch conference.

Although thousands of people attend pitching conferences each year, only a small percentage are successful in securing financing. For those who are not familiar with pitching conference concept, it usually involves several companies making a formal pitch for financing in front of a panel of investors. Depending upon the size and scope of the event, the panel of investors can range from high profile investment firms to independent angel investors. Participating companies usually have about five to fifteen minutes to make their presentation pitch. The goal of the presentation is convince an investor that their company or product is a worthwhile investment that will generate a profitable return. While investors often invest in companies or products that intrigue them, at the end of the day they are in this to make money. Because the competition is so intense, each presenting company has to work extra hard to ensure that their pitch is distinctive and effective.

While most start up founders do agree that these type of events can be helpful, most also agree that they don’t generate a high degree of results. Which is why some have started looking at other alternative options for generating start up capital.

There hasn’t been a recent report generated as to how much success start up businesses have had securing financing through social advertising, but the growing number of ads placed seemed to signal that this method of fund raising must be somewhat effective.

The key to having a successful social ad campaign for this type of need, is making sure that it is strategically placed. Meaning that the business looking for venture capital needs to have a good idea of where their potential investors are. This starts with creating a list of potential social sites based on viewership and category. Then it is a matter of narrowing the list down based on their specific need.

The design of the ad is also something that should be carefully thought out. Key points to remember include making sure that that ad message is very clear and specific, and at the same is visually appealing. It takes all these details to create an ad generate interest and attract the attention of the right audience.