Recently I read that four out of five small businesses in South Africa fail within 5 years of operation. These stats are quite alarming, especially since small businesses are the solution to employment opportunities and to boosting and transforming our struggling economy.
Why do businesses fail?
Today one of the largest hurdles affecting small businesses is the need for funding, but aside from that, there are many other factors that may cause a business to fail. Prof Christian Friedrich’s article on Moneyweb highlights two important factors that must be considered. You can read the full article here, however, in summary, the reasons are:
1. The business owner is typically too involved in the business and is the main source of actions and activities that drive the business.
2. Small businesses follow a very reactive strategy, which is linked to failure. In other words, there is no purposeful planning and proactiveness for success.
Having an awareness of these factors is essential because it helps entrepreneurs and business owners identify areas of development that they require in order to overcome the challenges and to beat the odds.
How digital marketing helps businesses succeed
Our experience with regards to providing digital marketing solutions to businesses, helped us to identify a need to help entrepreneurs and business owners understand digital marketing more fully so that they can identify gaps and opportunities to help grow their businesses using digital marketing. This led to the development of a few in-house digital marketing workshops which aim to provide entrepreneurs with an understanding of the digital marketing eco-system, along with practical and actionable strategies that can be implemented within their businesses.
Digital marketing, done properly, surely does help small businesses with purposeful planning, proactiveness and achieving success, however, this it is often an area that is misunderstood. The 3 factors listed below are, amongst others, are in my opinion the most valuable to helping small businesses succeed:
1. Digital Marketing levels the playing field.
Gone are the days that only larger companies could operate in the digital marketing field. With clever marketing tactics, small businesses can compete against larger more established companies and can attract their share of targeted traffic, allowing them to start up, survive and grow.
2. Insight and foresight
Once equipped with the knowledge of how to garner and sift through digital data, small businesses have a better chance of succeeding because data provides insight and foresight that can be used to make informed and proactive business decisions, which may include new services and products, including where and how to spend your marketing budget. Many entrepreneurs and business owners implement digital marketing without reviewing their digital data, and the data is really the key to knowing what is working or not working for your business.
3. Spend marketing budgets more effectively
The cost of reaching and engaging a targeted audience is and will always be considerably far less than the costs of traditional marketing, i.e. radio and newspaper ads; printed materials such as flyers, brochures; telemarketing and trade-shows etc. Digital marketing helps small businesses get the most bang for its buck, even helping to reduce the overall advertising spend.
Back to Prof Friedrich’s findings – The outcome of his findings resulted in a practical 3-day program to upskill entrepreneurs and business owners in the various areas of development. Six months after the pilot program, those who attended the program showed achievements in the areas of improved turnover, profit, and employment, which just goes to show that an action based learning and training approach is one of the essential development issues that will help entrepreneurs and business owners overcome the odds of failure.
If you’re an entrepreneur or business owner interested to learn how digital marketing can help your business succeed, then feel free to contact us for a no obligations consultation where we will meet with you to explore your digital marketing options.
Over to you
What are your thoughts on why small businesses fail and what solutions do you believe will help entrepreneurs and business owners in South Africa achieve success?