Top 3 Reasons Businesses Fail

Maintaining a small business is not easy in the fast-paced world today. Most small businesses fail to see a real profit, or are closed abruptly within the first five years. Over the span of the subsequent five years, a chunk of the survivors from the previous 5 years also close their doors.

What are the top 3 reasons that cause a business to fail?

The reasons generally lie in three main areas. Those areas are usually personal, client, and operations.

The Personal area deals with the personal motivations to start a business for the new business owner. For example, if an owner wants to start their own business, but isn’t willing to make the necessary sacrifices to help it thrive, then they are at a disadvantage if compared to other motivated business people. When a business starts operating for the first time, it often doesn’t have a lot of capital. Owners are required to sacrifice time, money, and happiness to succeed. When the new business owner is unable or unwilling to do what it takes to make it through these difficult years, then the chances that such a business will flourish are dramatically reduced. Many owners thought they could handle the natural stress of starting a new small business, but once the reality of “being your own boss” becomes increasingly apparent, they often have few other options but to close the doors.

The Client area is generally considered the most important components of any business. Without clients there are no sales, without sales there is no money, and without money there is no longer a business. There are several methods to growing a reliable client base. (View my previous post here: 5 Proven Methods to Help Grow a Client Base)

It is critical to have a cost effective marketing strategy that targets  potential clients. This important step is usually done by carefully developing a psychological profile of your client and then advertising in the places that they are likely to visit frequently. It is more costly to obtain a new client than it is to keep an existing one, you must make sure your clients are satisfied with your business services and products. (View my previous post here: 4 Client Retention Strategies).  Businesses fail by failing to attract paying clients in a cost effective way. Though you may have a product or service that potential clients are willing to pay for, but you can’t  market it in a cost-effective way, than you most likely don’t have a sustainable business strategy.

The Operations area is only second to the Client area. Business operations require appropriate methods of reducing costs, keeping track of paperwork, and continuously seeking methods for improvement. I have seen to many small business owners that fall into the trap of thinking that they know everything. This is where the idea of building business systems comes in to play. All successful businesses use systems to control and grow operations. If the business owner is unwilling to learn every day, or is unwilling to build a solid team that is allowed the freedom to perform their duties and learn from success as well as failure, then the chances of long-term success are very slim. Business efficiency is a critical metric that will affect all businesses at some point in time, so taking a proactive viewpoint about it is critical in this fast-paced era.

Probably the biggest hitter to business failure in the Operations area is lack of cash flow. When a small business runs out of cash, then the opportunity for the business to fail rises to almost certainty. Business management is no easy undertaking, but is a critical component of the successful business. Failure to consider the ebbs and flows of cash, where it is coming in from and going out to, will lead to disaster.

If the previously mentioned components are strategically thought out, and are appropriately designed for the unique small business, then it greatly increases the chances of survival. Failure to comprehend the integral details of your business while continuously striving to learn what it takes to succeed in the future could very well lead to failure in the long run.

If you are experiencing difficulty in putting all the pieces together, then consider hiring a small business consultant like myself to help you put the right systems in place that will increase the chances that your business will survive.

5 Proven Methods to Help Grow a Client Base

5 Proven Methods to Help Grow a Client Base

The first idea to understand when working to expand your client base, is to maintain focus on building a trust relationship with ALL potential clients.

Building trust is the key way to reach new clients in this new social-based market. Only after earning their trust can you can begin to educate them on recognizing the superior value of your product or service.

Here are the top 5 methods that my consulting firm uses to acquire more clients:

1. Leverage existing networks

An existing network is the best place to start, as word of mouth advertising will help increase the client base. Reach out to your network and ask them if they know of anyone that would benefit from your product or service.

A solid core group of clients will usually make referrals and they are more likely to recommend your business to their networks. Referrals are generally regarded as the strongest potential lead generator technique because you have already established trust within your network.

2. Grow your network

An awesome business cannot gain traction without help from others. Utilizing an existing network to expand your client base is required, but will only offer so much without growing the network with new lead generation techniques.

Grow your network by attending networking events, joining organizations, or hire a professional that understands new client acquisition techniques.

3. Add calls to action

There are some strategies to take with marketing that are readily actionable, and which have the potential to pull in new clients. Add a call to action for every piece of marketing you send out, which might be an Instagram post, a monthly newsletter, or any offline marketing strategies.

Calls to action are a simple method of increasing engagement. Ask your clients their opinions, ask for suggestions, tell them to tag you with a certain hashtag. Always provide a link for potential leads to sign up for your email list.

4. Offer free trials to new clients

Another strategy to acquiring new clients is to extend a free trial of your product or service. Free trials are a tried and true tactic used to attract new clients, which can lead to good reviews and testimonials. Leverage these reviews and testimonials (see number 5) in future marketing endeavors to acquire new leads and more potential clients.

A great business can find success with a rinse & repeat cycle indefinitely, gaining more loyal clients along the way.

5. Provide your service for free as a case study

Service-based businesses can offer their service for free for a limited time, in exchange for the new client to serve as a case study. The exchange is for the new client to provide a detailed account of the benefits of your service on several social media platforms, and is a proven method to acquiring new clients.

This tried-and-true method works by proving to a potential client that there is immense value in your service, and then converting them into a loyal client. This has the effect of increasing credibility & brand exposure, while building trust relationships along the way.

For example, if you offer personal training services, explore prominent members of the local fitness community and ask to network with them. Ask them about their business and figure out how to offer a free service in exchange for an authentic blog post, or social media review. Use this referral to your advantage, and it could lead to future joint ventures with other like-minded business owners in your area.

Thank you for taking the time to explore these proven methods to help grow a client base. Hopefully you will use these techniques to your advantage and find success continuously knocking at your door.

3 Ways to Validate Cost Per Client Acquisition.

3 Ways to Validate Cost Per Client Acquisition.

As your client acquisition consultant, I must inform you that Cost Per Client Acquisition is a very important metric, one that must be calculated and measured. There is a caveat here though, a low CPA does not always mean your marketing dollars are well-spent.

Here are the top 3 Ways to Validate Cost Per Client Acquisition.

  1. Track the Numbers and Gain Clarity: CPA is considered a key performance indicator metric for determining true return on investment, and most firms are obsessive about making quick business decisions based upon this number. Stated a different way, how many marketing dollars must a business spend to gain a paying client? It matters less about how many clicks, views, or likes a campaign receives, if it is not acquiring new clients (and in turn generating revenue), it cannot be deemed successful. Many businesses do not track this KPI effectively, and some businesses do not track it at ALL, which is a gigantic mistake in this market. There are plenty of tools to track marketing efforts that will help to understand how to calculate Cost Per Client Acquisition, and with a little bit of work on the front end, it becomes easier to see which campaigns are successful. Success should ultimately be determined in the long run though, not from short-term gains, and this is when client satisfaction & retention makes an appearance. More on this point later…


  1. Determine an Effective CPA: The common questions we receive from our clients regarding Cost Per Acquisition is what designates a good CPA… And how much should it cost a business to acquire a new client? The short answer is that it varies from business to business, and by cost of products or services rendered; but it starts with average revenue per customer. After you determine how much an average client is worth to your business, and then further elaborate the long-term value of a client, only then can you calculate what your average profit is.


A low CPA seems to be the consensus, but I will argue that each firm must find a meaningful CPA. A simple CPA calculation is something like the following, take the total revenue over a period (year/month) and divide it by the number of clients served during the same period. If you know approximately how much revenue is brought in from a client, then you can determine how much you are willing to spend to acquire a new client. Some other values to be considered during the CPA calculation are as follows, estimated lifetime client value, complaints, returns, and client churn rates. This is where a low CPA may not be the best KPI to drive your business, it may just drive your business straight into the ground. This is the caveat mentioned above, find out what CPA makes fiscal sense for your firm, and validate it against the cost of service per client.


  1. Validate the Importance of Satisfied Clients: As I have stated in a previous post, learning what it takes to create & retain satisfied clients (read profitable clients) will serve your business far longer than simply pulling in new clients only to watch them walk out the door, never to return. I will assert that over-all client satisfaction is the most important factor that will determine the success of your business. Sorry to be the one to break it to you so bluntly, but not all clients are equal, and some clients should be considered of negative value. How much of the valuable business resources are spent on the high-quality clients vs. the negative clients?


Did your last “promotional discount” campaign bring you non-committed clients, the ones that you could not please no matter how hard you tried? The ones that were quick to complain and who might have left negative comments on your social media platforms. Here is a perfect reason to qualify your clients before dropping your prices.


In conclusion, it should be very apparent that it is necessary to effectively track, and validate the Cost Per Client Acquisition. It is also important to remember that clients that are a good fit for your business will see the value that you provide, and will be more than happy to pay you for performing your service at the professional market rate. Client satisfaction is a high priority to ensure the profitability of marketing campaigns, and the longevity of your business.

The Top 5 Benefits for Having a Facebook Business Page

The Top 5 Benefits for Having a Facebook Business Page.

Facebook blows away the competition as the best social network to set up a business page. If you want to build a marketing platform to gain more clients, this is the first place you need to set up shop.

Here are the top 5 benefits for having and maintaining a Facebook business page.

  1. Increase Your Brand or Business Exposure to Potential New Clients:Facebook claims to have more than a billion users… I’m sure you can see that benefit. It would be detrimental for a business to NOT be using this to their advantage. Your newest clients probably live within a short radius from your business, but they might not even know you exist!
  2. Extract Leads:A bucket full of “Likes” on your page will never be enough to provide your brand with a long-term, sustainable business. I doubt that it is even possible now to make a good living in the short-term from simply using your Facebook page. Consider the scenario of Facebook closing their doors to businesses (PROBABLY WON’T HAPPEN… But what if?)

If you haven’t taken the time to build a trust connection with your clients outside of Facebook, then your business will most likely be in a heap of trouble. Smart business owners gather leads in the form of email addresses so they can contact their client base outside of Facebook. Extracting leads from this medium is a proven method to acquiring new clients.

  1. Reduce Marketing Expenses:As I have stated before, Facebook ads are relatively inexpensive when compared to traditional advertising (print, radio, TV, PPC), and are easily targeted and tailored to your market. This happens to be my firm’s specialty, so maybe I am a little biased, but that is because it really works when done correctly. There are plenty of ways to acquire new clients, but targeting Facebook users can dramatically reduce the Cost Per Acquisition.
  2. Reach a Targeted Audience:Obviously a carry-over from the last one… But only because it is critical. It is not feasible for everyone to “Like” your page. You really don’t want that because only a fraction of a percent of them might engage with your posts. The trick is to make the “Likes” inexpensive by targeting your ads. Combine this with building trust with these people, and you are on your way to acquiring new clients. You won’t incur a ridiculous amount of ad-spend, and potential clients are laser targeted.
  3. Facebook Smart Pixel:People that know me will tell you that I’m a numbers guy. Some might think I am odd, but I LOVE digging through statistics and metrics, and live & die by Key Performance Indicators. The reason is not always obvious to business owners because they are focused on running a profitable business. Most business owners struggle with understanding what KPI’s are intrinsic, but that is only because it is not their forte. Set up the FSP correctly from the start, and performance is tracked continuously.

    That which is measured, can be improved upon, and having this knowledge separates the successful business owners from those that struggle. A business can never fully track traditional advertising (see #3 above), and therefore will not know what is working or what needs to be fixed. The devil is in the reporting details.


Hopefully, you have gained a bit of insight as to why having a business page on Facebook is necessary, and the opportunities for growth from maintaining one. If you don’t have one already, or are not fully utilizing your current one, feel free to contact me to find out how we can remedy that together.