Fewer than 50% of businesses survive beyond five years. If you closely examine government figures you will see the evidence

The statisticians most obvious reason for death is the unfortunate ones eventually ran out of cash. This lack of detail is not helpful and so I decided to track down individuals directly and indirectly connected with failed businesses to see if I could determine the details, establish any common reasons for failure and publish them on the internet in the hope that my insights would help others avoid a similar fate. I uncovered eight consistent reasons for business death. Here are three of them:

No Vision, mission or strategy

“If you have not worked out where you are going then how are you going to get there?” You have to have a clear picture of what you want to achieve and how life will be for your business if you achieve it. To achieve anything you it is essential to have a strategy. Strategy can be likened to a route map it tells you how to get there. It’s a structured list of activities. To make a strategy work you have to create a business plan that not only contains the key actions and milestones but can used to measure business performance against. A key tool for monitoring business perfomance is the sales forecast.

Lack of a system for marketing or sales

Marketing is about finding markets and trying out strategies to position your offering in the minds of prospects and drawing them into your sales funnel. Sales is about engaging the prospect and getting them to buy your product or service. Marketing is a process of measuring and improvement of the methods you employ to attract prospects. selling is the process of acquiring leads, forecasting sales and closing business. In successful businesses a decent marketing and sales system is consistently supported by a well designed sales forecasting software system. Such a system gives you the ability to track and measure what is happening in the sales and marketing processes. These insights arederived from reports produced by the system which can then be used to compare what was planned with what actually happened. In summary what gets measured gets improved or discontinued. This is the critical formula for success.

Lack a system to monetise their captive customer base

There is a well known phrase that eighty percent of your sales should come from 20% of your customers. Your job is to achieve or surpass this figure. Customers who have previously made purchases from you are simpler and more cost effective to reach than prospects that have not. A combination of effective web based crm software and sales forecasting software should give you the knowledge of recent activity and allow you to discover opportunities in your current customer base.