Business Failure

Five Reasons for Businesse Failure or Underperformance

Business acquisition expert, Mike Warren, says that business failure is most often based on deficiency in four areas: Marketing, People, Systems and Money. And Eric T. Wagner gave these five reasons for failure in a Forbes article titled, Five Reasons 8 Out Of 10 Businesses Fail.

  1. Not really in touch with customers through deep dialogue.
  2. No real differentiation in the market (read: lack of unique value propositions)
  3. Failure to communicate value propositions in clear, concise and compelling fashion.
  4. Leadership breakdown at the top (yes — founder dysfunction).
  5. Inability to nail a profitable business model with proven revenue streams.

Warren and Wagner make some great points. And now for my list of why  companies fail or underperform, followed by a few tips on how to make sure your business is one of the successful ones.

  1. Flawed Concept. In my day job as a marketing and revenue growth consultant – as well as my own experience as an entrepreneur and investor; I am exposed to a lot of unusual business ideas. This is doubly true when I teach or mentor would-be entrepreneurs as a SCORE volunteer. Sometimes the concept for the business is so outside the realm of viability, chances for success are slim. No doubt there are so-called flawed concepts that return millions to brave founders, but these are exceptions that are usually not worth risking time and capital on.

Antidote: Vet your idea with experienced entrepreneurs who have your best interests at heart. There is an old expression: If three people tell you that you are drunk, go lie down. Likewise, if three experts tell you that your idea has no merit, either disprove their objections or drop the idea. But don’t fret if your first idea doesn’t pan out. Heed the words of Richard Branson: “Business opportunities are like buses, there’s always another one coming.”

  1. Money Woes. Money problems can impact business owners in many ways. The obvious issue is when there is not enough cash flow to fund current operations and/or expansion. Nothing can keep an entrepreneur awake at night like the knowledge that expenses are running ahead of cash flow. On the other side of the coin, entrepreneurs who accept funds from outside entities (friends and family, angel investors, venture capitalists) face enormous pressure to perform and can even be ousted from their own companies. Jessica Bruder talks about the high price business owners pay, especially regarding financial issues, in her Inc.5000 article, titled The Psychological Price of Entrepreneurship.

Antidote: Cash flow is lifeblood to every business. Build your venture with the concept of minimum viable product (MVP) or service (MVS). Hold cash tightly and scale only after you have proven your business/revenue model at low cost. Above all, do not take investment capital until you have to. If you have a proven scalable model, your valuation and control over the future of your company, will be greatly enhanced.

  1. Founder Weakness. Eric Wagner referred to this issue as “leadership breakdown” and “founder dysfunction”. Whatever terms you use, if the founder(s) has shortcomings they are unwilling to address, the company may be doomed to mediocrity or worse. A founder who has great product development skills will have a hard time succeeding without experts in marketing, sales, finance, etc. I wrote about this in a post titled, How to “Engineer” a Marketing Fiasco.

Antidote: Decide whether it is more important for you to be right, or to be successful. If, as I hope, you decide the latter, you need to do a thorough and frank appraisal of your strengths and weaknesses, as well as the rest of your management team. Ignoring your weaknesses will not work. You need to fill in the gaps with internal or external resources but gaps must be filled!

  1. Failure to Differentiate. It’s a highly competitive world and unless you can clearly articulate why your product or service is different and preferable to the many other options businesses have to spend their money – you will be considered a commodity. Generally, commodities have to compete on pricing, and this is not usually a position you want to occupy.

Antidote: The brand promise is what you assure people they will receive when they do business with you. To be effective, your brand promise should be differentiated (preferably unique), compelling and specific. Make sure you complete work on your brand promise before you take your products or services to market.

  1. Lack of Systems. This is a factor mentioned by Mike Warren and a big hindrance to the ability to scale or sell your business. Common areas where systems can help include marketing, sales, finance, product development and customer service.

Antidote: Read (devour) two books on business systems: The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael Gerber; and Work the System by Sam Carpenter. The strategies and tactics in these two books can change your business and your life. And when it comes to building your marketing and sales systems to prevent business failure, read my own The Expert’s B2B Revenue Growth Playbook. To be effective, you need to document your systems and follow them consistently.

Big Idea

Your Brand Promise – Why You Need a Big Idea!

Some marketers and business owners believe that the strength of their product or service is what determines success. While this is no doubt true in a few rare cases, most often, even a great product or service has to be marketed properly to succeed. And the best marketing is centered around what we call a BIG IDEA. By this I mean that you have (and show) a true competitive differentiation, and the value-add extra that makes what you offer both unique and better than your competitors.

If you are going to create a powerful marketing and sales engine, then you must absolutely have a compelling marketplace position. Positioning is one of the most misunderstood, unappreciated, and neglected parts of the marketing process. I think David Ogilvy was right when he stated that positioning is the most important decision made in promoting a service or product and also when he said that successful positioning has more impact on the results of a promotion than how an advertisement was designed and written. This is why I urge our clients to devote plenty of time to craft their positioning and brand promise before starting any new campaigns.

The brand promise is what you promise people they will receive when they do business with you. And position is defined as “the manner in which an organization and the products or services it provides are perceived by prospects and customers.” Every organization, as well as each product or service, has its own unique brand promise and position. A company can occupy different positions among various audience segments.

People can also have their own unique positions (leaders like Bill Gates and Warren Buffet are good examples), which are often built and reinforced through social media.  While there are some pitfalls to avoid, companies can gain major benefits from properly positioning their key executives. But be careful, because as John Quelch said, “Personal brand equity erodes much faster than corporate brand equity.”

Since it is hard to be all things to all people, I strongly suggest that you ditch the “me-too” approach and focus on your own big idea. The best way to think about this is to consider how you would answer if a prospect asked you the question: What’s the big idea about your company?  You might as well do this because prospects ask themselves this question every time they consider purchasing from you.  The reason many of them don’t buy from you is they don’t think your offer is a big idea, perhaps because you don’t tell them why this is true.

The me-too approach may be safer but it can also make you appear to be a commodity, and commodity companies are not successful in an era where consumers have so many choices.  The lesson is simple: be different and have a BIG IDEA.

Competitive Leverage

How to Crush the Competition by Leveraging Experts

Many of my initial meetings with clients include questions such as What is the best resource to learn to build a website? or How can I create a Facebook ad that will drive traffic to my website? While I encourage my clients to understand basic concepts, I always tell them to enlist the help of people in their personal network who have specialized skills rather than do the actual work themselves.

Successful entrepreneurs know that leverage is at the heart of business success. When your car has a problem, most people don’t spend 2 years to learn to become an auto mechanic so they can repair their own car. This is highly inefficient. Instead, they just take the car to a repair shop where an ASE certified mechanic fixes it for them.

The same can be said for many tasks in your business. Why would you learn to code a website when you can hire someone for a few bucks that knows how to not only build a website but is also versed in the best practices to do it for you?

What I tell new entrepreneurs is to take the tasks that they routinely perform and break them into their component steps. I then recommend that they outsource any steps that are of such a nature as they can be easily performed by someone else.

There any many websites that focus on connecting the business with specialized freelancers. Four of the most popular sites include:

As anyone who knows me knows, I am a flaming dyslexic and as such my writing is full of misspellings caused by transposition errors that spell checkers all too often do not find. Tools like Grammarly are helpful but I need the assistance of an editor to make sure my writing makes sense to someone other than me. Therefore, I employ an editor to proofread all my posts before I post them publicly.

Moreover, when it comes to some WordPress plugins like WooCommerce or NextScripts auto poster, there are many sophisticated features that require complex setup. However, rather than spending my time researching and reading forums in an attempt to set up the plugins myself, I simply hire an expert in that tool to do it for me.

I have hired virtual assistants, graphic designers, social media experts, programmers, researchers, PC experts, Network IT professionals, and so many more.

I personally use Upwork and occasionally Freelancer since I’m most familiar with their interface but they all share some common attributes.

Here is what I really like about them.


For one, I often hire offshore resources. Now I can hear a few of you say why not hire a local person. I have been called unpatriotic by some but here is how I see it.

First, the cost savings are quite compelling. I often save a significant amount depending on the skill.

For example, my WordPress programmer is $9.00/hr and lives in India. My incredibly talented IT guy is just $8.00/hr and my virtual assistant is $6.67/hr. They both live in the Philippines. My editor lives in Canada and is $10.96/hr.

Hourly rates for people with similar skill levels in the U.S. would be 5-10 times the price I pay when I go offshore. These cost savings allow me to reduce my expenses and therefore allow me to offer many of my services for free or at much lower prices.

Moreover, these savings allow me the additional income that I can spend at my local restaurant or local store.

Working Hours

Then there is the fact that many of my resources live on the other side of the planet. While some may see this a problem, I see this as an asset.

When I end my day, I send many of them instructions for things I need to be done. While it is the end of my workday, it is at the beginning of theirs. So when I get to work the next morning, they have completed the tasks assigned to them.

When I hire local resources, I normally have to wait an additional day for them the complete the tasks during the next workday.

Moreover, when the resource is offshore, they are fixing things when the bulk of my traffic is sleeping so performance is never compromised.

Better Hire

Then there is my ability to hire better. Rather than hiring a resource based my gut feeling after a single phone call or interview, these freelancing platforms take a page out of the eBay playbook in that after each transaction the buyer and the seller rate each other.

Before I hire someone, I can see what others have said about them. Each freelancer is rated on a 1 to 5 scale on such dimensions as: skills, availability, communications, quality, deadlines, and cooperation. There is also a narrative from most of the previous customers they worked for that describes their overall impressions and experience.

Since nobody wants to be trashed by the other party that will reduce the person’s opportunities for future work, it keeps everyone honest and doing the best job they can.

When I post a job, I often get about 50 or more responses in less than 3 days. I often eliminate all the responses from people that have less than several thousand dollars in projects on the platform so I can ensure they have several quality reviews.

Then I filter the list of applicants to those that have a 4.8 star or better rating. That often limits my list to about 10 or some qualified candidates.

For these finalists, I do much more thorough research by reading each review before I hire them. By the time I hire them, I have a good idea about the kind of work I can expect.

However, when I hire local resources, I have only what the vendor tells me as I can’t easily question their previous employers.

In conclusion, when I outsource tasks that are not core to my business, it often costs me significantly less than local resources. The work also gets done much faster because they are both specialists and because they do it when I sleep. Moreover, my hiring decisions are better because I can review all past performances. So what’s not to like about outsourcing?

How can you crush the competition by leverage expert resources through using a freelancer platform?

Note: this article originally appeared at



Brand Awareness

How to Achieve Powerful Brand Awareness for Free or Low Cost

Brand Awareness has two goals. The first is moving the knowledge of your product or service from the unknown or unconscious mind to the conscious mind. The second is making a positive association with the brand.

According to John Jantsch in his book “Duct Tape Marketing” a customer needs to Know, Like, and Trust you to make a purchase. Brand awareness helps with the “Know” part and may contribute to the “Like” part of your marketing effort.

A prospect’s awareness of your brand aids in the sales conversation, but does not necessarily produce a sale. Brand awareness helps to associate the company’s name with the brand’s message. The rule of seven applies to brand awareness. Therefore, brand awareness requires a constant effort and can not be done just a few times and abandoned because it has not produced sales.

Direct marketing, often confused with brand awareness, by contrast has one goal: to convert the prospect into a customer through direct means. Direct marketing accomplishes the “Like” and “Trust” part of the marketing effort. Direct marketing need not always be done face-to-face or on the phone, but can include direct email, interactive websites, etc.

If the prospect is aware of your product and thinks positively about it, it is infinitely more likely that that s/he will buy from the company when they are a viable buyer. When it comes to sales, direct marketing alone without any brand awareness is far more difficult.

Free Marketing Ideas to Create Brand Awareness

Brand awareness often is not directly responsible for making sales, but aids in the conversion rates of more direct marketing and sales efforts. The brand’s message has to be constantly repeated to cross the divide from residing in the unconscious mind to the conscious mind before it becomes effective. Therefore, brand awareness is a constant effort. It cannot be done just a few times and abandoned because it has produced no sales.

That being said, here are 5 ways to create brand awareness for free.

  1. Write a Press Release about a new product or newsworthy event and distribute it using the many free Press Release Services.
  2. Create a human interest message and contact your local news stations to see if they are interested in running a human interest piece on your business. Local news programs are always looking for stories to run on slow news days. When I started my Invisible Fencing business I got all three major networks at the time (ABC, NBC, and CBS) to come out and do a story on us.
  3. Market your human interest message to your local newspaper. I contacted the writer of the business section of our citywide and neighborhood newspapers, which like the news stations were looking for story ideas and were eager to help us get our message out.
  4. Find a complementary business and exchange advertising posters to cross-promote each other’s stores. For example, a sporting goods store and a golf course or a fabric store and sewing machine repair service could make good pairs.
  5. Take out an ad on Craigslist to promote your service business or to sell your products.

Marketing Ideas to Create Brand Awareness For Under $10

BUSINESS CARDS – If you have a business to consumer (B2C) business, you can use tools like Business Decisions (often available at public libraries) to identify the ideal market demographic and psychographics, known as a Landscape Segment in Business Decisions, for your product or service. Within the text of each Landscape Segment is a description of the demographic’s preferences, which includes where they shop and spend their leisure time.  A free copy of the Business Decisions Landscape Segmentation Resource Manual can be downloaded from the resource tab of

Once you have identified where your customers frequently shop using the Business Decisions Landscape Segmentation Data, you can go to the parking lot where your prospect frequents and hand out your business cards.

Recently I was waiting for my wife while sitting in my car, when a fella came up to the window and said that he noticed my cracked windshield. He handed me a card for his windshield repair business. Years ago I placed business cards under cars’ wipers or under the rubber window seal by the door lock, with some marketing success. While it is technically not illegal to leave business cards on cars some people can get pretty annoyed, especially if you touch their new vehicle. 500 business cards can be purchased for under $10 through companies like Vista Print.

CORRUGATED PLASTIC YARD SIGN – We have all seen political yard signs all over neighborhoods as an election nears, or we have seen “open house” signs on houses for sale.

Placing a reusable sign with your company and contact information in the front yard of a customer’s home, either while you are working or for a few days after the job is complete, is a good way to promote your business to the neighborhood. This is particularly effective if the neighbors can see your work, such as with roofers and house painters.

You can also often place these low cost signs in vacant lots or near intersections for even greater exposure. At a cost often in the range of $10 per sign, this is a cheap way to create brand awareness.

PICKET SIGN – You have seen people protesting on the corner for higher wages or against unfair labor practices, but picket signs can also be used to create brand awareness.

You can simply attach poster-board to a stick to make a picket sign with your company’s information. Have idle employees walk up and down the street in front of your establishment to draw attention to your business.

Marketing Ideas to Create Brand Awareness For Under $75

BANNERS – The other day I went to the bank and passed a car parked in a dirt lot next to the roadway selling bonsai trees. He displayed a banner that ran the full length of his car, attached by bungee cords, to alert people to the fact that he had something to sell.

A reusable banner can be hung on fences, walls and even your vehicle parked on the roadside. These banners often cost less then $75 to design and make.

SPINNER/ARROW SIGN – You have seen these at intersections. Workers can be seen moving to their own beat, listening to music as they dance and twirl a sign promoting an income tax service or grand opening.

You can use an idle employee to stand on the roadside listening to his favorite music and spinning a sign to draw attention to your message. Signs can be had for about $75.

MAGNETIC VEHICLE DOOR SIGN – Magnetic vehicle door signs are very popular. A typical sign can be purchased for under $30 each, so your vehicle can become a rolling billboard for under $60.

The beauty of this solution is that the signs can be installed on your personal vehicle when used for business, then removed when you don’t want them.

A note of caution; you may want to check with your insurance agent whenever you place signs on your vehicle. Some auto insurance policies do not allow you to operate a vehicle for business without a separate business vehicle insurance policy. Each insurance company is different, so you should check your policy before using your personal vehicle for business.

VEHICLE DECALS – Add a logo or more permanent lettering to your business vehicle than is possible with simple magnetic signs. The price for modifying two doors can be under $75.

Marketing Ideas to Create Brand Awareness For Under $150

MAGNETIC CAR TOP SIGN – Pizza delivery vehicles often employ a magnetically mounted roof or window mounted sign. In most cases these signs include an internal light that plugs into the vehicle’s cigarette lighter, which draws even more attention to the sign after dark.

The signs are visible across a sea of cars and in large parking lots. Most cost about $150 and can be reused indefinably.

COSTUME – Dress idle employees in a costume and have them wave at passing traffic. Costumes (such as the popular chicken, lady liberty, or hotdog) can often be purchased for under $100 and be used over and over.

I am reminded of a variant on the costume idea when I travel to places like Sturgis, SD, during rally week. There you can often see businesses who hire shapely young women to wave at the traffic sporting nothing but bikinis to draw attention to their business.

SANDWICH BOARD – You see them on sidewalks, inside office buildings, and even at busy intersections. A sandwich board is a free standing A-frame sign where you can place your message on either side. These signs have the flexibility to set them up and/or move them to a new location in seconds. A deluxe A-Frame sandwich board can often be purchased for under $90.

WEARABLE SANDWICH BOARD – A variant to the traditional stationary sandwich board is a wearable version.

Have an idle employee walk along the street in front of your establishment or at an event to draw attention to your business.

Professionally created wearable sandwich boards, complete with straps, can be purchased for under $75 for a blank board. For another $75 the board can be printed with your logo and message. Of course, you can create your own wearable sandwich board by using two poster boards and some ribbon for next to nothing.

 CAR MOUNTED MEGAPHONE/PA SYSTEM – The classic image of a car driving slowly down main street with a political campaigner urging people to get out and vote for their candidate has been used for years.

Or the iconic ice cream truck, slowly driving down an urban neighborhood street playing music, which acts as the pied piper for kids. That same concept can bring brand awareness to your business in the same way.

Either project a live voice, a recorded message loop, or music while you drive your signage-affixed vehicle down a busy street, drawing attention to your business or special invitation.

A decent car-mounted megaphone can be had for under $150. Handheld units can be purchased for under $75.

Miscellaneous Low Cost Marketing Ideas to Create Brand Awareness

WALL PAINTING – Contact the owner of an old barn or blank-walled building to see if you can hang or paint your message. Or use a variant of wall painting, and utilize a projector to display your lighted message on a blank wall for even greater impact at night.

AIR DANCER – You have seen the inflatable tube man dancing in front of a business. You can often purchase an arm-waving inflatable tube man, also known as an air dancer, for under $200 to get folks to look your way as they pass your establishment.

PARADE FLOAT – Many parade organizers look for businesses to create floats. By re-purposing an old trailer and adding a few leftover items, most businesses can create an appealing float on the cheap.

THEATER AD – Contact your local movie theater, where you can often advertise for under $10 per day.

SEARCH LIGHT – Often used to draw attention to a new location, you can rent a search light that is visible for many miles and creates a curiosity factor, causing people to go out of their way to discover the light’s source. Prices start at $350.

Uncommon Advertising Locations for Brand Awareness

URINAL AD – Public restrooms for men have urinals affixed to the wall. When in use the man is forced to look straight ahead at a blank wall. With a captive audience for a minute or so, some establishments display advertisements positioned at eye level.

PUBLIC TRANSPORTATION – Many bus, light rail, and taxi companies derive additional revenue through advertising inside as well as outside the vehicle.

BENCH AD – Bus stops often have a simple bench or an enclosure to keep people out of the weather. These generally contain space for advertisements.

The Sequence Signs for Brand Awarness

Growing up in Boston, on the way to the airport you would pass a series of very simple signs on the side of the road. They encouraged you to relocate to Boston and read: “If You”, “Lived Here”, “You Would”, “Be Home Now”.

Burma-Shave became an outdoor advertising icon by delivering a catchy message with a punchline in the dawn of the car culture.

Sequencing signs are most effective on secondary roads, where traffic moves slower than on the interstates. A simple series of about six roadside signs like the corrugated plastic yards sign discussed above, placed only about 25-50 yards apart can create a unique marketing message.

Since traffic counts on these roads are often lower, they are not the domain of the big outdoor advertising agencies.

Permission to erect a series of corrugated plastic yard signs can often come from a single land owner and be far cheaper then standard outdoor advertising.

Bumper Stickers Promotion for Brand Awareness

Ever notice that on the trunk of most vehicles is a decal or emblem identifying the dealership where the vehicle was originally purchased? For the life of the vehicle the dealership’s brand is viewed by thousands and thousands of drivers as they wait at stop lights and stop signs or walk through parking lots.

Some time back I remember a radio station that gave away bumper stickers. Each day they sent out someone from the station to a undisclosed location, whose job it was to look for one of the bumper stickers. If they located your vehicle with the sticker you won a prize. Drivers were eager to secure one of the stickers so they might be the next winner.

I consider this one of the most brilliant marketing ideas I have ever seen, since it created a desire in a person to actually promote the radio station. Imagine you owned a tire store or oil change center and you offered vehicles with your bumper sticker promoting your brand a discount off their next purchase. You could create an army of potential marketers driving around town promoting your business every day.

This post was derived from a few excerpts from the book “Practical Marketing Concepts For Your Small Business”. Buy the compete book at

Practical Marketing Concepts For Your Small Business is a wisdom packed book that was written for the budget conscious entrepreneur looking to better market their products or services.

The books is divided into 9 chapters that look at:

  1. How to identify and target viable customers
  2. Tactics to get noticed in an ocean of interruption marketing
  3. The attitude and behaviors of various target demographics
  4. The buyer psychology including behavior economics and emotional appeals
  5. Dozens of free and low cost ways to achieve greater brand awareness
  6. Tactics to make your message more memorable and sticky
  7. Common pricing mistakes that can kill a sale
  8. Ways to leverage economic gyrations and current events to improve sales
  9. General marketing and sales advice to help make better marketing decisions

As a serial entrepreneur and mentor to thousands of small businesses the author has distilled a lifetime of business marketing content that every entrepreneurs should consider applying to their business.

Practical Marketing Concepts For Your Small Business is a concise and easy to read guide packed with solid advice delivered in small bites that the reader can use to make incremental improvements to their marketing efforts. Be sure to get your copy today!

This article first appeared on LinkedIn, June 21, 2017.