Starting and operating a small business is not easy. As more and more people choose entrepreneurship instead of full-time grind, the marketplace is getting increasingly competitive and saturated. It has never been easier to set up a business and advertise it online. But as competition intensifies, it has never been more challenging to connect with your potential customers.
The well-known and feared statistics show that over 80% of online-first businesses fail in the first year, and for the remaining 20%, there is a 50-50 chance to fail in the second year. Several classic mistakes can kill new businesses – such as poor finance management, hiring the wrong people, and compromising customer satisfaction.
The biggest issue of all, that most new business owners and first-time entrepreneurs are challenged by: not getting sales. In this article, we will break down the most common issues and outline solutions to address those.
Why is your business not (enough) getting sales?
1. Your value proposition is not relevant
Before investigating any further, you want to audit and validate if the value proposition of your business is actually in line with what your potential customers need. Products and services with a great market fit will become popular effortlessly. But if it’s not relevant then hardly anyone will buy it.
The fastest and most cost-efficient way to get valid feedback from your target customers is to do a business concept audit. This audit helps to understand how your business concept is received by your target customers. Are you solving a real problem or your idea is seen to be useless? Does your business model make sense to your customer?
Getting these insights straight from your potential customers will eliminate most of the counterproductive guesswork from your business troubleshooting. Understanding how your value proposition is perceived is the single most important thing you need to know to be able to optimize your business concept.
If you get positive results from your audit then you can look into other issues, but if your business concept gets low scores then the best thing to do is getting back to the drawing board to redesign it.
2. Your business and revenue model is not attractive
Let’s assume that your core value proposition makes sense to your customers and you passed your audit with acceptable scores. The second item in line to investigate is your business model and pricing options.
In a nutshell, you need to make sure that the way you offer to solve problems is compatible with how your customers want their problems to be solved. This might sound complicated but let’s make take a painter as an example.
Peter wants to have his room painted beige and finds the website or Facebook page of John, who happens to be a painter. He calls John for a quote and timeline, expecting a quick answer. Unfortunately, John just finished a course about upselling so he bundled interior design services together with painting. He says first he will design the room and paint it based on the design. Painting costs X, design cost Y so the total price will be X+Y. Since Peter does not need design, John just lost a customer.
This short story is an excellent example of what happens when you come up with innovative ideas without understanding customer needs. Solve the problems of your customers on their terms, the way they need it.
Offering flexibility and a variety of options will be always welcome on the market so keep as many options open as possible, without being confusing.
3. Your branding and marketing are off
Classic big mistake, but goes unnoticed almost all the time. In the world of small businesses, stakeholders are often too focused on developing their product, or optimizing their business model – in the case of startups, they are too busy with running around for investment.
But how can anyone expect customers to become interested in your product when the presentation of your offerings and your company sucks? Why would they take the time to explore what you offer when all your branding and marketing do is an unimpressive, lackluster first experience? Spoiler alert: you are done, they will ignore your brand.
Here at Brand Auditor, we are all about creating customer closeness. Our clients use our audits to find out why they cannot connect with their customers – and you can do it too with us.
Our brand and business concept audits clearly highlight what your target buyers like or dislike about your branding and marketing communications. Such insights help to understand what aspects of your brand need to be improved to make your company and products attractive.
There are various ways your branding can go wrong:
- You are too focused on irrelevant marketing messages
- Your marketing does not convey values that are expected from a company like yours
- Your tone of voice or inconsistency undermines your credibility
- Your brand personality is too generic
- And a lot more
4. There is no urgency to buy what your sell
Even if your value proposition makes sense and your business model is welcomed by your target customers, a lack of urgent demand will cause low or no sales.
This typically happens when your solution is not designed to solve urgent problems, or the value it brings to your buyers is not significant. You can help this in many ways, like developing a clear presentation of the benefits and advantages your buyers will get.
Just being a little bit better will not make your customers give up a proven solution. You need to be a LOT better, and you have to be able to demonstrate it.
Is your product or service a life-saver or just a nice-to-have? Be a life-saver.
5. There is a better alternative than your business
Well, as a small business you will have competitors that are more reputable, and more established than you. This is how it is. As a small busniess, your focus first should not be on mass-market adoption, but getting your first few customers who can help to keep your business going.
There will be always better opportunities, but being better means lot of things to different people. Someone will like to use a large company because of thir perceived reliability. If you can present your business to be the same credible and reliable then you will be able to get that customer. If bigger competitors can beat you buy being able to offer lower rates then try offering more value so some customers will choose you instead.
The point is that you don’t need to be the best, as being the best is relative in many ways. But try to be the best in what you do, and try to be the best for those potential customers who are the most likely to choose your brand.