Less than 50% of businesses survive more than five years. Check government statistics if you don’t believe me

The authorities propose the reason for failure is the failures basically ran out of cash. This description is not very useful and so I decided to seek out people directly and indirectly involved in failed businesses to see if I could determine the details, establish any consistent reasons for failure and post them on the web in the hope that my findings would help others avoid a similar fate. I discovered eight consistent reasons for business failure. Here are three of them:

No Vision, mission or strategy

“If you haven’t a clue where you are heading for then how are you going to get there?” You have to have a clear vision of what you want to achieve and how the future will be for your business if you achieve it. To achieve anything you need a strategy. Strategy can be likened to a route map it tells you how to get to where you want to go. It’s a systematic list of activities. Strategy is only effective if it is translated into a business plan which can be used as a benchmark for business performance. A key tool for tracking and measuring business perfomance is the sales forecast.

Lack of a system for marketing or sales

Marketing is about exploring markets and trying out strategies to position your proposition in the minds of prospects and pulling them into your sales pipeline. 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 ways you use to acquire prospects. selling is the process of acquiring leads, forecasting sales and closing sales. In successful organisations a decent marketing and sales system is consistently supported by a well designed sales forecasting software system. The tools in these systems help you to track and measure the activity in the sales and marketing processes. Outcomes arederived from reports generated by the system which can then be used to compare what you predicted would happen versus the real outcomes. In summary what gets measured gets improved or discontinued. This is the critical formula for success.

Lack a system to get sales from their current customer list

There is a well known rule that 80 percent of your sales should come from twenty percent of your customers. Your focus is to achieve or exceed this number. Customers who have previously bought from you are simpler and cheaper to persuade to buy from you than prospects that have not. A combination of effective web based crm software and sales forecasting software should give you the knowledge of historical activity and allow you to uncover opportunities in your current customer lists.