Marketing Planning

3 obvious reasons why small businesses fail

We’ve all heard the old adage ‘fail to plan, plan to fail’ so why is it that small business owners continue to ignore such advice?

Planning is taken very seriously by larger organisations but is often neglected by small businesses who arguably need it more. Take the time to implement a detailed and thorough marketing plan that will pay dividends in the long-term.

According to entrepreneur and former Dragon, James Caan, small business owners perceive planning to be a luxury .This seems absurd especially when you consider that a recent Barclays Local Insights survey reported that 41% of Colchester based businesses fail within the first three years, a figure that could be significantly reduced with the appropriate planning in place. Many people hold the belief that ‘spur-of-the-moment’ decisions are better than those planned long in advance. This may be the case when making an impromptu decision to see a movie but not when it comes to running your business.

There are three main reasons why small businesses overlook the importance of planning – and then fail.

1. Lack of time

Many small business owners cite their lack of time as a major hurdle preventing them from planning ahead.  There also tends to be an unhealthy preoccupation with the day to day business activities and an apparent disregard for their long-term overarching goal. By making the time to plan, once that plan is in place, you’ll find more time in every day, as resources become focussed on what is important- eliminating wasted time on activities that don’t contribute to your long-term goals. Allow your self time to plan and close your door to do so. Better yet, take a day out to think and plan, away from all distractions.

2. Focus on the short-term

In a fragile, post-recession business world, understandably the main focus is on survival and short term measures tend to be in place to achieve this goal. For many small businesses adopting a long-term approach entails a consideration of the year ahead but this is not sufficient. Too much emphasis on survival in the short-term is what has contributed to the high failure rate of small businesses. Colbea Chief Executive, Bob Baggalley, who are a not for profit organisation that help to grow small businesses in Essex stated that “businesses don’t even look 12 months ahead before coming to see us. They need a three year plan to provide proper discipline.”

3. Limited resources

Everything is driven by the bottom line for small businesses and as planning does not provide an instant return it has a tendency to be overlooked. However it is due to the limited resources of small businesses that planning needs to take on greater importance, to ensure that each resource is utilised effectively, improving profitability.

The marketing that small businesses undertake tends to be haphazard with a clear absence of strategy. Strategic thinking is essential to help you determine a basis for creating a sustainable competitive advantage.   Careful planning will keep your marketing activities focussed and based on key business goals. In many instances small businesses are unaware of what is involved in the creation of a marketing plan and believe it to be only for larger organisations. This was confirmed by Bob Baggalley, Chief Executive of Colbea “Marketing is a key skill our clients need to learn. Most think they’ll just place an advert.  They underestimate the skills they need to learn.”

A simple plan is better than no plan at all, however for the greatest success, a marketing plan needs to be well structured and thoroughly researched. It needs to be a living plan that sets out a long term vision of where you want to take your business and how you will compete. In too many instances, small business owners will say they have a plan in their minds but fail to share their vision and plan with their employees. In order to gain the best utilisation of your resources and improve profitability, every resource needs to understand the plan and the part they play in it.

It must be remembered that a marketing plan does not restrain the business. It is flexible and able to react to a changing environment. It also avoids making those knee-jerk reactions that are not in your organisation’s best interests.  

It is crucial that small businesses appreciate the importance of planning ahead. It can not be seen as a luxury. A great quote from Enterprise Nation sums it up perfectly ‘You wouldn’t start a long journey without a map, so why would you start a business without a marketing plan?’  Sharpen your strategic thinking and map out a clear marketing plan that you can share with your team. We’ve written a blog article that can help you improve your strategic thinking. You can also subscribe to Strategic Insights for regular useful tips and advise on how to take a more strategic approach to your marketing. Sometimes, outside resource and a fresh perspective is what is needed to plan successfully.

Could you use some marketing planning support for your business? Give us a call and let’s chat. We can provide the support you need to get your marketing headed in the right direction. 

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