What is the #1 Reason Brick and Mortar Small Businesses Struggle?

60 replies
1. Lack of capital
2. Poor product/service
3. They work harder, not smarter
4. Too much competition/Saturated market
5. Poor management
6. Poor marketing
7. Other: _______________________
#brick #businesses #mortar #reason #small #struggle
  • Profile picture of the author abbot
    Banned
    Originally Posted by PaulintheSticks View Post

    1. Lack of capital
    2. Poor product/service
    3. They work harder, not smarter
    4. Too much competition/Saturated market
    5. Poor management
    6. Poor marketing
    7. Other: _______________________
    6...hands down...
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  • Profile picture of the author Rearden
    Cash flow.

    No systemized approach to sales and marketing.
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  • Profile picture of the author Erica Leggette
    I feel that poor management is hurting a lot of businesses these days. Having good products & services AND having staff members that don't know or appreciate that is overkill.

    And poor marketing.
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  • Profile picture of the author TheBigBee
    Originally Posted by PaulintheSticks View Post

    1. Lack of capital
    2. Poor product/service
    3. They work harder, not smarter
    4. Too much competition/Saturated market
    5. Poor management
    6. Poor marketing
    7. Other: _______________________
    7. Poor location selection - failure to analyze local data in identifying target rich environments
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  • Profile picture of the author BizManRobert
    7. Other: _______________________

    NOT filling a WANT/NEED - Failure to see if their business location had a hungry starving crowd for their service/products...
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    • Profile picture of the author Claude Whitacre
      I own a successful retail store and speak to groups of brick and mortar business owners. So I have a little experience.

      Location can kill you. Opening a poodle babysitting service in a town of 2,000 isn't going to last long. Opening a restaurant on a dead end side street isn't bright. If you open a restaurant where the last 6 restaurants have failed...there may be a location problem.

      Opening a retail store in the back of a building is suicide. Selling something like used children's books (only used, only children's) is so narrow a market that no location will save you.

      I saw a vacuum cleaner store open up in the heart of Amish country. Really.

      Some business owners manage their money so badly that no amount of business will be enough.

      But the largest number of businesses die a slow death because they haven't the first clue how to market and sell.

      I have a friend who had a mattress store. Good location, great prices, lots of stock. He went out of business because he advertised the least expensive mattress he had and nothing else. So he only attracted shoppers looking for the cheapest mattress. And then he would complain because he only got low price shoppers. It was sad, because I tried to help him, and he wouldn't listen.

      Incredible lack of sales skills. Even if you have the greatest location, inventory, signage, and advertising...if nobody can sell, the business dies.

      Especially if you are a specialty store selling better quality stuff/services.
      Clerks kill businesses.
      A bad attitude and lack of sales skills are sure business suicide. Regularly arguing with customers will kill a business ...slowly, until word gets out.

      The economy is bad because so few people know how to sell anything. I keep going into stores and talking to the person "In charge of sales avoidance".
      I don't want to not buy...I want to spend money, but they talk me out of it.

      Three hours of decent sales training would double most retail store's sales.

      "Can I help you?". Man, every time I hear that I want to say "No...I was going to buy something...but you are forcing me to say that I'm just looking"

      "May I help you?"..."No, we are just looking"..."OK, if you have a question, I'll be in the back..."
      Slowly I'm dying inside every time I hear it.

      Customer's that are especially bright, may interrupt this dance with "Well, actually, I was wanting to look a new (whatever)"

      I once had a salesman that told me "Claude, they were so close to buying. They said "yes" five times!"

      That was 25 years ago, and I still grit my teeth thinking about it.

      A business owner (in the vacuum cleaner business) called and said that he had no business. I asked how he advertised. he said "Advertising doesn't work". What a fool. If he had a brain he would have said "The advertising I tried didn't work. But I know that it must work for some, because I see so many ads during the day. What do they know that I don't?'

      But no..."Advertising doesn't work" Sad, and incurable.
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      • Profile picture of the author PaulintheSticks
        Originally Posted by Claude Whitacre View Post

        Some business owners manage their money so badly that no amount of business will be enough.
        That reminds me of a store I managed that was barely afloat. After quitting, I agreed to train the new manager. What was the first thing she did? Bought a new upgraded computer and upgraded software. Doh!

        The other thing that can be a real killer is overhead. I see struggling small stores that have 4 employees and two of them standing there talking in a space that is 50% larger than what they need filled with twice as much inventory as they need.

        And then when you combine that with ads that say "we sell shoes", you have something like 80,000 small businesses closing each year.
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      • Profile picture of the author bwh1
        Originally Posted by Claude Whitacre View Post

        It was sad, because I tried to help him, and he wouldn't listen.
        Above ignorance IMO

        and point 6, missing Marketing skills as that is ultimately the main skill which includes all the other parts you've mentioned.

        G.
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      • Profile picture of the author AndrewCavanagh
        Originally Posted by Claude Whitacre View Post

        "Can I help you?". Man, every time I hear that I want to say "No...I was going to buy something...but you are forcing me to say that I'm just looking"
        In the retail businesses I ran saying that to a customer was
        an offence that we would fire you for.

        We literally told our staff "If you say "can I help you" to a customer
        we will fire you!"

        That got their attention.


        There are so many different ways for a brick and mortar business to
        struggle or go broke.

        One that hasn't really been mentioned is staff issues...all the way
        from poorly trained or just plain poor staff to straight out staff
        stealing from the business.


        A very large percentage of business problems are caused by the
        owner or manager losing objectivity.

        They have problems but they can't see the solutions that are
        often quite obvious to someone like you.

        That's just one reason you can be so valuable to a business...you
        are an objective person with solutions that can start helping them
        right now.

        Kindest regards,
        Andrew Cavanagh
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        • Andrew,

          Thank you for mentioning this.

          Originally Posted by AndrewCavanagh View Post

          A very large percentage of business problems are caused by the owner or manager losing objectivity.
          I once had an employer who sabotaged his own success daily.
          1. He constantly had talk radio on where hot political topics were constantly being broadcast throughout the store.
          2. He would tell customers he was selling the store and moving out of the country.
          3. He would express how much he hated the USA and how the government was sticking to him.
          4. When asked how business was doing customers were told "I'm barely able to make payroll".
          5. Myself and the other employees were a constant source of blame for his business going down the tubes.
          6. He would not allow us to distribute business cards, make sales calls or do any follow up.
          7. The competition was always in his store buying his inventory and he would give them service calls to do while we sat in the store twiddling our thumbs.
          8. He was all about giving everyone a discount even when the customer wasn't questioning the prices.
          9. When selling any type of hardware or products he would immediately direct the customer to his cheapest products and tell the customer they don't need the more expensive one.
          10. He didn't believe in marketing and finally removed himself from the phone directories.
          My list can go on, but you get the picture.
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          • Profile picture of the author Rob28x
            Originally Posted by ThePromotionalGuy View Post

            1. When selling any type of hardware or products he would immediately direct the customer to his cheapest products and tell the customer they don't need the more expensive one.
            I am currently working a part time job at Advance Auto Parts. It's the first big corporation I have ever worked for. I took the part time job to help ease my financial stress, but I can honestly say I have learned a lot from working there already. One thing that surprised me was that when a customer calls on the phone, we hit the button for "phone in" and it sorts the computer results by lowest priced brands first. If they stop in the store, we hit "Walk In" and it sorts by highest price first. Their reasoning behind doing that is that the majority of people calling on the phones are calling to price shop. If they are already in the store, they are there to buy something, so we start with the most expensive.

            They are also really big on pushing what they call "Attachment items", with say brake pads, they would be brake cleaner, brake fluid, guide pin grease, etc. I know they do that due to the mark up on those items as people are price shopping the pads and rotors, not the small stuff that goes along with performing a brake job.

            I also get a lot of flack from other employees because I am spending lots of time with the customers and in turn have higher sales numbers. (They are big on numbers and goals for each employee for each minute of each day, including transactions per hour, dollars per transactions, etc)

            But here's the thing, when someone walks through the front door, the other employee's always say "Can I help you find something?" I just shake my head as the customer follows with "No" or "Just looking".

            When I see someone walk through the door I will say something like "What brings you in today?" and get the ball rolling with the customer. I have learned never to ask them something that can be answered with a simple "no".
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  • Profile picture of the author IM nice guy
    I think the main reason, in general (I know generalizations are usually useless, but...)
    is the fact that a LOT of small business owners are pretty clueless about their overall vision, including the HOW of how they are actually going to make their business work.

    In short, I think a lot of new small brick and mortar business owners are incredibly idealistic.

    Idealism and business, not always a good mix
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  • Profile picture of the author mjbmedia
    Many are hobbyists and not business people, they love what they provide but have little idea how to set up, maintain and grow a business, some get lucky, some learn, some outsource their weaknesses, too many try to do it all and fail, yet people loved what they provide
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    • Profile picture of the author Claude Whitacre
      I'm not sure this will help the OP. But...

      A nephew came to me and asked me to invest in a new coffee shop he wanted to open. I never loan money to relatives. And I never loan money to non-relatives. That covers everyone, I hope.

      But I asked him a few questions...like
      "Have you ever worked in a coffee shop?" "No."
      "How do you know you'll like it?" "After I open one, I'll find out. How hard can it be?"
      "How will you market the business?" "I'll advertise in the newspaper"
      "What are the costs and margins?" "We can figure all that out later".

      My advice was to work in a coffee shop for six months. Learn how it works, who the suppliers are, how to hire...But my nephew left thinking I didn't "Believe". He was right.

      Be an apprentice. Nope. borrow money from relatives. The thought of learning, earning, and investing himself...simply never occurred to him. College.

      Before I opened my retail store, I found a guy bringing in a million dollars a year out of a small retail store in a small lower income town. Barberton Ohio.

      I worked out of his store for six months, learned what I needed to know, made money doing it, and opened my store...with a credit card. The retailer that taught me knew of my intentions.

      I was profitable from day one.
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      • Profile picture of the author John Durham
        Originally Posted by Claude Whitacre View Post

        I'm not sure this will help the OP. But...

        A nephew came to me and asked me to invest in a new coffee shop he wanted to open. I never loan money to relatives. And I never loan money to non-relatives. That covers everyone, I hope.

        But I asked him a few questions...like
        "Have you ever worked in a coffee shop?" "No."
        "How do you know you'll like it?" "After I open one, I'll find out. How hard can it be?"
        "How will you market the business?" "I'll advertise in the newspaper"
        "What are the costs and margins?" "We can figure all that out later".

        My advice was to work in a coffee shop for six months. Learn how it works, who the suppliers are, how to hire...But my nephew left thinking I didn't "Believe". He was right.

        Be an apprentice. Nope. borrow money from relatives. The thought of learning, earning, and investing himself...simply never occurred to him. College.

        Before I opened my retail store, I found a guy bringing in a million dollars a year out of a small retail store in a small lower income town. Barberton Ohio.

        I worked out of his store for six months, learned what I needed to know, made money doing it, and opened my store...with a credit card. The retailer that taught me knew of my intentions.

        I was profitable from day one.
        You would love my friend David, his family has been in retail for 50 years now... they are all about it. I said that because reading your posts reminds me of him alot.

        Much like you can open a retail store and profit from day one...I can do that with a room full of telemarketers. If it were part of my plan, I could easily take a few thousand dollars and a handful of people and be in profit from day one.

        Experience... love reading advice that rings of it.
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      • Profile picture of the author jrobconsult
        Originally Posted by Claude Whitacre View Post

        I'm not sure this will help the OP. But...

        A nephew came to me and asked me to invest in a new coffee shop he wanted to open. I never loan money to relatives. And I never loan money to non-relatives. That covers everyone, I hope.

        But I asked him a few questions...like
        "Have you ever worked in a coffee shop?" "No."
        "How do you know you'll like it?" "After I open one, I'll find out. How hard can it be?"
        "How will you market the business?" "I'll advertise in the newspaper"
        "What are the costs and margins?" "We can figure all that out later".

        My advice was to work in a coffee shop for six months. Learn how it works, who the suppliers are, how to hire...But my nephew left thinking I didn't "Believe". He was right.

        Be an apprentice. Nope. borrow money from relatives. The thought of learning, earning, and investing himself...simply never occurred to him. College.

        Before I opened my retail store, I found a guy bringing in a million dollars a year out of a small retail store in a small lower income town. Barberton Ohio.

        I worked out of his store for six months, learned what I needed to know, made money doing it, and opened my store...with a credit card. The retailer that taught me knew of my intentions.

        I was profitable from day one.
        Sounds like an owner I did a promotion sale many years ago. She had never worked in a retail store and decided to buy one and then open another because the rent was cheap. The cheap rent was because it was in an industrial area .

        To make a long story short, both her businesses died quickly.
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      • Profile picture of the author PaulintheSticks
        Originally Posted by Claude Whitacre View Post

        I'm not sure this will help the OP.
        Very helpful. You've convinced me to give up my dream of opening a Dunkin Donuts at least until I spend 6 mos. working at one. Time to make the donuts.

        Be an apprentice.
        I've been an apprentice more than once. The real challenge is that good mentors are really hard to find. Most of them feel a need to assert their "superiority" by belittling those underneath them thus ruining the relationship. The reason they like to "teach" is because it makes them feel better about themselves which stems from a lack of self esteem. Its very common...even on this board.
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        • Profile picture of the author Claude Whitacre
          Originally Posted by PaulintheSticks View Post

          The real challenge is that good mentors are really hard to find. Most of them feel a need to assert their "superiority" by belittling those underneath them thus ruining the relationship. The reason they like to "teach" is because it makes them feel better about themselves which stems from a lack of self esteem. Its very common...even on this board.
          Paul; I guess it's the price you pay. Although my mentors were never like that. Maybe it's because I always went to them as a fellow business person...an equal. (Not saying you didn't)

          I will say this though...it really does make me feel better about myself helping others. Not ego. Self awareness. Ego is what people have when they aren't aware. Meaning that egotists are simply not as bright as they think. Loudness and bragging is not awareness.

          Anyway. My experience is a little different from yours.

          As an aside,a man came into my retail store yesterday saying he was looking for a vacuum cleaner. He was insulting, rude, and I considered throwing him out (something I have only done a few times). You could call him an egotist.
          He really was pretty bright, but was aggressively insulting me. He told me I had a lot to learn about selling (this was in the first minute). He said my questions were stupid. I admit, I was enjoying myself...knowing he would pay.

          Did I get upset? Not really. I thought of throwing him out because he said something slightly dismissive to my wife.

          But I saw him as a thing to mold. A person to play with. I knew he would buy anything I showed him. And he did. Before he left we were fast friends, and he sincerely apologized for what he said in the beginning.

          Being an egotist, a bully...is a weakness. One that can be exploited.

          Good mentors are hard to find. But you do the best with what you have. I went to five vacuum cleaner stores asking about an apprenticeship. They all told me "Whatever you do...don't go see Julius Toth. He's evil"

          Five guys in a row told me that. So I knew I had probably found my guy.
          I met Julius, immediately bonded with him (I mean really, not as a technique)
          and he was very generous with his time and information.

          We both only cared about making money. No ego from either one of us. that was 30 years ago, and we are fast friends to this day. Oh, you know that Amish heater you see advertised in print everywhere? That's him. He writes those ads and brought the heaters to this country.

          Anyway, you don't have to take the first business owner you find as a mentor. Believe me, if you look...they are out there.

          And now I have to get back to writing.
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        • Profile picture of the author socialentry
          Originally Posted by PaulintheSticks View Post

          I've been an apprentice more than once. The real challenge is that good mentors are really hard to find. Most of them feel a need to assert their "superiority" by belittling those underneath them thus ruining the relationship. The reason they like to "teach" is because it makes them feel better about themselves which stems from a lack of self esteem. Its very common...even on this board.
          I`ve had a few really bad mentors/teachers.

          But even they teach some things (even if often they do so unintentionally).
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  • Profile picture of the author Aaron Doud
    Claude I agree 100%. I am a huge believer in learning on someone else's dime.

    It always amazes me how people start businesses in industries that they have never even worked in.

    People need to get out there and work the business before they start the business. So many people would be more successful at their business had they managed someone else's for a few years first.

    Get some knowledge while getting paid. And if you are good you will provide great value for the owner and have a head start on success for yourself. That is a win win.

    I would suggest getting a job in a different location then where you want to open yours. Nothing wrong with a bit of a commute for a year or so to get your learning on.
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  • Profile picture of the author bizgrower
    1) Passion or at least liking what you do and wrong reasons for getting into the business and unknowns:

    The owners of the hotel I manage bought the hotel because they thought it would be more "prestigous and lucrative" than their dry cleaning business. Other than a conversation piece, I don't think the people they care about really give a hoot about what they own. What they did not consider about hotels almost killed the wife from the stress and the business was going downhill while they were owner/operator. It is a 24/7
    operation, whereas dry cleaning was M-F, 9 to 5. It took them 50 miles away from their
    community and friends. Hotel customers and staff and marketing are much harder for them
    to deal with than in the dry cleaning business, etc., etc. and they really don't care enough
    about the guest's experience.


    2) Filling a need in the market and detailed market knowledge:

    The President of the Chamber of Commerce where I used to live would see so many businesses start and fail because they duplicated what was already there. The town
    really did not need or support another pizza place or casual men's clothing store...

    Also, I am learning that I just might be able to build a ten or twelve room hotel and take
    home as much or more than the owners of the 33 room hotel I manage, or the 80 room
    local competitor. Less overhead/staff and higher occupancy all year round at a little higher
    rate.... And it would not be a Bed and Breakfast, which I would not be good at operating
    as I am not people person enough for a BandB, not awake enough in the morning, and not
    a good cook... (Examples of knowing the ins and outs of the business you want to start.)

    3) Being penny wise and pound foolish and uncaring:

    This goes into the area of not having effective systematic marketing and customer service
    programs and policies in place so you get good reviews, maintain a good reputation, and
    get repeat and referral business. AND, don't lose your local base of customers.

    On the one hand:

    Pregnant Mom Surprised By Eatery's Act of Kindness | ABC News Blogs - Yahoo!

    On the other hand:

    At my hotel we are supposed to charge $5 for each additional adult. Because of online travel agencies such as hotels.com, there is a lot of confusion, ie. "I told them we had four adults" that I decided it's not worth hassling the customers over the $5. The numbers used to be that a happy customer would tell 5 or 6 people about their experience and an unhappy one would tell 10 or 12 people about how horrible you are. Now they tell the internet how horrible you are.

    I actually had a restaurant manager try to figure out the cost of adding carrots to a calzone and charging the customer accordingly and telling the waiter to tell them they could not ask for that again. All because carrots are not a standard calzone ingredient and
    he ran the "cost" of a waiter going to the salad bar for the carotts and the "cost" of the
    cooks time to slice and install the carrots.


    ------------------------------------

    With respect to location, it's not only location, location location, but the landlord and overhead as well. I know a struggling retailer who spent a ton on fixtures and furniture, and has too much rent because it's a new building. And the landlord would rather fight with the county instead of fixing a little road to the strip mall. So, basically he is hurting her business because that little road would make a huge difference in the amount of people who come into the mall.
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  • Profile picture of the author Jason Kanigan
    They struggle because they believe merely opening up for business and being there is enough.

    Nope. Nobody knows they exist. Nobody knows why they should shop there.

    Just like in interpersonal selling, the prospect (their market) has been surviving all this time without the business there to help them. So why now should they change their behavior and start shopping there?

    Marketing and sales are the biggest problems businesses have. If they were good at it, they'd know how to find and communicate with their target audience, and start the value exchange flowing.
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  • Profile picture of the author PaulintheSticks
    How about commoditization or lack of differentiation?

    I'm sure we'd all agree there are quite a few important components of a successful business. My guess is if you get even half of them right, you'll probably do ok. But most businesses probably fail in 8 out of 10.

    Seems like this would really open up a huge opportunity for local business consultants but what I'm finding out is that the vast majority of small business owners are closed minded and not willing to invest in their success and implement new ideas....they just keep doing what doesn't work.
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    • Profile picture of the author Climb Online
      Originally Posted by PaulintheSticks View Post

      How about commoditization or lack of I'm finding out is that the vast majority of small business owners are closed minded and not willing to invest in their success and implement new ideas....they just keep doing what doesn't work.
      That's because of a large ego, new ideas mean they been doin it wrong! That is the perception anyways.
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    • Profile picture of the author Aaron Doud
      Originally Posted by PaulintheSticks View Post

      How about commoditization or lack of differentiation?

      I'm sure we'd all agree there are quite a few important components of a successful business. My guess is if you get even half of them right, you'll probably do ok. But most businesses probably fail in 8 out of 10.

      Seems like this would really open up a huge opportunity for local business consultants but what I'm finding out is that the vast majority of small business owners are closed minded and not willing to invest in their success and implement new ideas....they just keep doing what doesn't work.
      I would never be upset being a commodity if my volume was that of a commodity. People give that a bad name. Who cares if you are a commodity if you are the one selling. If you are losing out to your competition it doesn't matter how the prospect views the product or service. All that matters is that for whatever reason they didn't buy from you.
      -They bought from a cheaper competitor? Ok why are you not cheaper than they are?
      -They bought an inferior service? Ok why didn't you show them how yours was a better value? I buy Corvettes. I could buy cheaper cars but the Corvette is a better value to me vs. a Cruize for example.

      Trust me... rather they viewed it as a commodity meant zero in the long run. You didn't show them the value. End of story.

      "I know you can buy _____ from anyone Mr. Prospect. And I will tell you this... we are not the cheapest. What I can promise you is that our ______ will give you the _____ (best value, great ROI, etc etc)."

      Once you have been in sales long enough you learn that very few people buy based on price and even those people who do normally are buying for something else disguised as price. For example they may buy the cheapest car on the market so they can brag to their friends how they bought a brand new car for less than most people buy used cars (IMO foolish but to them that has value).

      So don't be afraid of being a commodity. Most of the biggest companies in the world sell commodities. Some of them such as Apple sell commodities at prices and profits much higher than their competitors. Wouldn't you rather buy the $300 iPod vs. the $99 cheap MP3 player? Stop and think about why. I bet when you do you will realize it is because you know more people have the iPod and that it is easier to use. In your mind it is the better value even though it costs a lot more.

      As for business owners being closed minded I will say some are but in my experience the vast majority are not. What they have learned over the years is only to listen to people they trust. If you show them you are an expert and what is in it for them they will listen and will be interested.

      This is the reason that big brands have it so much easier selling the things many consultants here sell. They already have that trust so the business owners don't know they are paying more for less value with the yellow pages websites for example. It is your job to be that expert. Become that expert and build a true local company and you and your team will be able to walk into any business and command attention.
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      • Profile picture of the author PaulintheSticks
        Originally Posted by Aaron Doud View Post

        Most of the biggest companies in the world sell commodities. Some of them such as Apple sell commodities at prices and profits much higher than their competitors.
        I was referring to differentiation. Many companies' products/services have very little differentiation. Are you saying Apple products are not differentiated in the marketplace? Or maybe you are using a different definition of commodity. This is the one I was using:

        Wikipedia: A commodity is something that is bought or sold in commerce but has no measure of differentiation. No matter who produces it, it's essentially the same.

        Wouldn't you rather buy the $300 iPod vs. the $99 cheap MP3 player? Stop and think about why. I bet when you do you will realize it is because you know more people have the iPod and that it is easier to use.
        I just bought an Iphone and it wasn't because everyone else has one. Its because I believe the quality of the product and company is superior to others.
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        • Profile picture of the author Aaron Doud
          Originally Posted by PaulintheSticks View Post

          I was referring to differentiation. Many companies' products/services have very little differentiation. Are you saying Apple products are not differentiated in the marketplace? Or maybe you are using a different definition of commodity. This is the one I was using:

          Wikipedia: A commodity is something that is bought or sold in commerce but has no measure of differentiation. No matter who produces it, it's essentially the same.
          In essence yes many products are "the same". An iPod is just an MP3 player. An iPhone is just a cell phone.

          But they can be shown to be so much more. Watch Apple's ads. Really watch them. Now stop and think. Is the feature/benefit they are showing unique to said product? Most of the time it isn't. Apple makes a lot of money telling people about the great things their products do that pretty much every competing product does as well. The key is they actually take the time to show their customer's these things. That is how you increase the value.

          We can try to show how things are different but if the customer doesn't care about said difference it won't matter. Just as we can show things that every one of our competitors has but because it has value to the customer they will choose us.

          When we figure out our customer's needs and find ways to fulfill those needs that is when they see value.

          My point is nearly everything can be a commodity yet everyone of them can have value beyond every other similar commodity on the market when we take the time to show it to the customer. And Apple has shown us that often it isn't the differences that matter.... often the thing the customer most wants is what nearly every competing product does. But are you finding out what matters? And once you know it matters are you showing it to them.

          Commodities sell for the very reason for which they are "commodities". Which is the fact that lots of people want them and thus many companies produce them in large quantities.

          You can be like me and say that nearly everything is a commodity or you can say that nearly everything is not a commodity. But in the end products that compete are by nature very similar (I mean hell they are all fulfilling the same needs/wants). Yet even something like gas can be shown to be different from one station to another. And gas literally all comes from the same gas pipe line. Yet Shell tells us why we should buy their gas vs. all the other stations' gas.

          Your product/service is as similar or different as you make it. Even a diamond is just an over priced crystal until a marketer convinces people(in the 20th century) that you have to give your bride to be a diamond.
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    • Profile picture of the author iMassMarket
      I have both retail and restaurant experience.

      As a former restaurant consultant with years in the business and a proven track record of increased margins I can tell you that the majority of reasons restaurants fail is piss poor management.

      Don't get me wrong... you need at least a half decent location, good food at affordable prices, clean and pleasant surroundings and a friendly staff as a foundation, but...

      Most owners can't manage and realize it too late. And those that know they can't manage don't have the skills to hire great managers.

      Time and time again I've seen owners who are totally lost when it comes to food costs, productivity, negotiating with vendors, training employees or spend all their time learning the basics while the back of the house goes up in flames and customers are left unattended in the front of the house. Then on the flip side...

      I've seen owners brag about their managers who can't even read a P&L statement, order food, meet payroll and have a fear just greeting customers.

      Honestly, restaurants are easy to open and even with a very low check average serving quality food can generate 40-100k a week in a 150-200 seat house. It's after it's opened when it starts falling apart. That's when the dream of owning a restaurant is crushed by the reality of daily operations.

      Now, unlike restaurants which I have opened several with a single print story and operated with NO advertising, retail requires a great deal of advertising.

      You can't count on location and word of mouth to help attract customers like a restaurant can.

      I mean, who can't drive by a restaurant, see the decor, its parking lot, read the sign and have a pretty good idea what food they serve and about how much it will cost? You really can't do that with retail unless you know the chain or store beforehand.

      Retail is an advertising game. You always have to advertise and you always have to have a better, bigger deal or be the cheapest on the products you sell. No one cares about the ambiance of a retail store in general. And unless you're in a few select cities, you're not trying to impress someone for the store you shop at, rather the deal for the product you bought.

      Whew, this became a long post. Basically my point is this. If you're asking the #1 reason brick and mortar small businesses struggle than I would have to say retail struggles the majority of time because they lack good advertising and restaurants struggle because of poor ownership/management.

      Of course there are many reason #2's, 3's and 4's. But I'm sure no one wants to hear me rattle on and on.
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        • Profile picture of the author jrobconsult
          Originally Posted by OfflineGold View Post

          The #1 reason is businesses do not understand advertising. They come from the 'build it and they
          will come' mentality. They put their businesses on the back of hope. They hope people will eat
          their yummy catfish sammich and love it so much, everyone will come running.

          They do not comprehend the need to continually keep the pedal to the metal.
          This is why so many fail with daily deals. Whether daily deals are good for a business is a discussion in itself. However, if you are going to run one must get contact info and follow up.

          I have purchased over 50 daily deals and zero have followed up with me.Yet, if you contact that business, they don't need your help, even if you offer a free trial.
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  • Profile picture of the author Radegast83
    6) Poor marketing plays a huge part in their failure imho.

    Friend of mind has a removal business and used to complain about how bad the business is, credit crunch, people don't spend money, they rather hire a van and do all the work themself etc.

    However his marketing was, quite frankly, shocking. He spent a fortunes on Yellow pages adverts, leaflets, newspaper ads, business cards etc. Yet, he thought a simple website is a waste of money. I got a student to create a simple web site for him for few hundred bucks, showed him Google+ and Google Adwords.. Guess what.. within few weeks the guy was busy, fully booked. He took on another employee and is thinking of buying another truck, that's how busy he is.

    Now he thinks it's some sort of magic secret I shared with him.. He thinks it is something they taught me at the MBA course I studied. Well no, it isn't .. IT IS CALLED COMMON SENSE :-) Some small business owners are stucked in 80s as far as marketing is concerned.
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  • Profile picture of the author Eddie Spangler
    Seems like this would really open up a huge opportunity for local business consultants but what I'm finding out is that the vast majority of small business owners are closed minded and not willing to invest in their success and implement new ideas....they just keep doing what doesn't work.

    I often feel this waybut the more I look at it I feel like this is not the main issue.I believe what Aaron said may be more true

    What they have learned over the years is only to listen to people they trust. If you show them you are an expert and what is in it for them they will listen and will be interested.


    The reality is that MOST people reading this forum are neither experts nor can they convey that they are to the prospect, who has heard it all before... They want to believe but they keep falling for and paying for crap that doesnt bring results and become jaded after a while.

    Thats why the testimonials and reviews are going to so important, because even after you have been around a while people STILL will have never heard of you.
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    • Profile picture of the author jrobconsult
      Originally Posted by Eddie Spangler View Post

      Seems like this would really open up a huge opportunity for local business consultants but what I'm finding out is that the vast majority of small business owners are closed minded and not willing to invest in their success and implement new ideas....they just keep doing what doesn't work.

      .
      Yep, you are so correct. What is sad, even ones who are close to closing their doors will not try new ideas.

      One thing, I need to mention is that often a spouse, friend, or even another business owner is giving them advice and has no clue on how to run a successful business.
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  • Profile picture of the author NewParadigm
    many ok to good, even some great businesses got pretty much un- necessarily slaughtered by banks tightening up, yanking lines of credit, not doing loans/LOC, not renewing 5 yr commercial real estate financing, w/out outrageous collateral requirements while the fat cats at the big banks got bailout money. It was truly a step on the small/medium guy disaster by big government and big banking.

    aside from that, its real hard to whittle it down to one top reason since there are a few criticals you must have. B&M do suffer from not doing due diligence in first place to establish a real case for satisfying a need/want with a large enough customer base to justify the investment. This would include location issues.

    Secondly, lack of capital to survive the first several months/yr especially now since getting capital is much tougher you need a much bigger chunk of money for staying power.

    Third, marketing and generating sales. Many think the world will beat a path to their door once they open.
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  • Profile picture of the author ronrule
    Originally Posted by PaulintheSticks View Post

    1. Lack of capital
    2. Poor product/service
    3. They work harder, not smarter
    4. Too much competition/Saturated market
    5. Poor management
    6. Poor marketing
    7. Other: _______________________
    5. Without question. If I was going to add a #7 it would be "Pride"

    The reason most businesses fail is because they are started by people who are great at doing something - but that doesn't mean you're great at running a business.

    Everyone who's an expert chef, contractor, web designer, etc. thinks they can go into business for themselves - yet the best run restaurants, construction companies, and web design firms aren't run by chef's, contractors, and web designers. They're run by business people who employ those experts.

    And what I mean by my "Pride" add is the whole "my business is my baby" mentality. Ever watch the show Shark Tank and see these kids who have great ideas, but obviously no business management skills, turn down million dollar offers to buy their patents? The fact they're so full of themselves that they think their concept can't work without them is a poor management style that will lead to the early demise of their company. It's insane... but for whatever reason that mentality prevails and people have to learn the hard way.
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  • Profile picture of the author maverick8
    The majority of business fail because of one thing and that is SALES period
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    • Profile picture of the author Tim Bazley
      Yes poor sales and marketing is one big reason.

      But here in the U.K., I'd also say poor customer service. (Not sure about the USA, I suspect things are better there).

      Try this little experiment...

      1. Contact 10 small bricks and mortar UK businesses.

      2. Pose as a prospect interested in their goods / services but not as an immediate buyer. I.e. you want more information / a quote / a brochure / someone to call to discuss your requirements etc.

      3. Wait and see what they do.

      I guarantee that at least 4 out of 10 (and maybe as many as 7 out of 10) will let you down.

      They won't return your call, they won't turn up on time, they won't show up at all, the quote / brochure won't arrive, your letters and emails will go unanswered!!

      Honestly! The number of times this has happened to me and so many people I know is just unbelievable.

      And I'm sure there's many a former business owner out there, scratching their head and wondering just where they went wrong!
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    • Profile picture of the author ronrule
      Originally Posted by maverick8 View Post

      The majority of business fail because of one thing and that is SALES period
      Not necessarily... many businesses think they have to be the lowest price, so they get a ton of sales at the low price point and then realize they can't afford the overhead required to expand at such low margins. They can't afford to hire additional staff so quality suffers. By the time they realize their prices are too low, it's too late.
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      • Profile picture of the author maverick8
        Originally Posted by ronrule View Post

        Not necessarily... many businesses think they have to be the lowest price, so they get a ton of sales at the low price point and then realize they can't afford the overhead required to expand at such low margins. They can't afford to hire additional staff so quality suffers. By the time they realize their prices are too low, it's too late.
        I understand what you are saying. I was referring to the majority. If a business doesnt know their margins, well then they should never be in business.

        At the end of the day if the business has their prices to low thats just a lack of business 101 knowledge and common sense. If they raise their prices to where they need to be. They will fine if they can get the sales and keep their business. It all refers around sales in the majority of cases.

        It is the same as big businesses fail to innovate therefore get taken over in market share by other competition. Because they didnt innovate their sales drop. Just about everything you do in business is to accommodate more sales or an activity to generate more sales. If you are not doing something that fit into those 2 things, do you really need to be doing what you are doing?
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  • Profile picture of the author Rus Sells
    Loaded question and any one who's been in business long enough knows it.

    Originally Posted by PaulintheSticks View Post

    1. Lack of capital
    2. Poor product/service
    3. They work harder, not smarter
    4. Too much competition/Saturated market
    5. Poor management
    6. Poor marketing
    7. Other: _______________________
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  • Profile picture of the author misterme
    I'd say reasons are: Letting their employees run their business (down to the ground). Not taking an active role beyond emptying the cash register. Lack of acumen.

    I know a couple of non-competing business owners that I'm friends with and they asked ME for my advice. They KNOW I make sales in the four to five digit range in what's a very competitive market place in a very over saturated market. Yet despite what I advised them, they just can't see their way out of the box they like to stay in.

    I started soliciting other businesses with a free offer to help boost their sales efforts and all's quiet there too. I haven't given up on it, but it amazes me that there's this kind of inertia, though it doesn't surprise me.
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    • Profile picture of the author Claude Whitacre
      Originally Posted by misterme View Post

      I'd say reasons are: Letting their employees run their business (down to the ground). Not taking an active role beyond emptying the cash register. Lack of acumen.

      I started soliciting other businesses with a free offer to help boost their sales efforts and all's quiet there too. I haven't given up on it, but it amazes me that there's this kind of inertia, though it doesn't surprise me.
      Misterme;
      Yup. I worked with a company (in sales)that had a lady who made their appointments. She only answered the phone to arrange a time. They had already agreed to see us. she was telling the callers all about the product, prices, financing...before the sales rep could see them. Half of the people...calling in for an appointment...decided against it after talking to her.

      I told the owners that she was killing their business and why. They got angry that I would attack their beloved employee. Oh well.

      I've talked to three types of people that have the inertia you talk about.
      Authors, artists, inventors. I'm assuming photographers fall into the artist category. I've spoken to one group of Authors. Never again. The idea of sullying their art by getting people to buy their books repels them.
      Like inventors, they want to be discovered..not market.

      It took me a while to get it. But I think I do now.

      I scan three forums every day. Two are in retail niches, and the other one is here. The marketing and selling categories of the other two forums are dead. People want to talk politics and what equipment they use. Frankly, I've given up on them. I scan for mention of my name..because I speak at their conventions.

      Talking about marketing to 98% of business owners is like driving through quicksand with your parking brake on...with bald tires. I speak from experience.(about the marketing, not the quicksand)

      Thank goodness that there are enough of the 2% that are interested in improving their business, that it's worthwhile (at least to me).

      But I have long ago given up the idea of converting the unconverted.

      I have a speaker friend who is a multi-millionaire in the vacuum cleaner retail business. After putting on bootcamps, speaking at conventions, and creating advertising templates that are proven to work..he is reviled.

      He loses money every time he speaks (he does it for free. I don't). He puts on bootcamps that lose money. Why?

      He loves his business. He is trying to save the industry.

      One of the most kind and generous people I know. And the forums spew forth bile every time his name is mentioned. Why? Because he is a master marketer (better than I am), and to them, he must be doing something wrong.

      Claude "probably didn't get enough sleep" Whitacre
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  • Profile picture of the author misterme
    Claude, I think business owners resent marketing. Especially the creatives. They have pride in their work and think it's so good it should sell itself. I understand that. And I tell them, in a perfect world, it would. But then, in a perfect world, only the best artist would get all the commissions. So thank goodness for marketing otherwise the rest would starve.

    Non-creatives may resent marketing because they're feeling "why the f&$!! do I have to do all that s$%!! JUST to bring someone in the f&&$@@! door!" and I understand that too. It IS a ton of work.

    Originally Posted by Claude Whitacre View Post

    I scan for mention of my name..because I speak at their conventions.
    Just curious what happens if they do say your name, like, three times?
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    • Profile picture of the author Claude Whitacre
      Originally Posted by misterme View Post

      Claude, I think business owners resent marketing. Especially the creatives.
      I love talking to the creatives. Highly intelligent people make for a great conversation. Usually I can get them to delegate the marketing to me (or someone else). They just don't want to think about it, I find.

      Originally Posted by misterme View Post

      Non-creatives may resent marketing because they're feeling "why the f&$!! do I have to do all that s$%!! JUST to bring someone in the f&&$@@! door!" and I understand that too. It IS a ton of work.
      It sure is. And it takes a long time to learn. Marketing and selling are almost completely counter-intuitive. (My homework today was to use "counter-intuitive" in a sentence). So I get the resistance too. But it's painful to see.

      Originally Posted by misterme View Post

      Just curious what happens if they do say your name, like, three times?
      Say it now...and don't turn around.......
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      • Profile picture of the author DABK
        For some is the need to have everything (or too many things) go through them. Creates a bottleneck. Especially big if they have no systems...

        And lack of systems is the next one I find is big. I mean, no automated systems... If they have client intake done by 3 people, they have, at best, 3 systems, at worse chaos.

        And this one I don't even know what to call, but I was once hired by a business owner to help her get clients... She had lost a certain percentage of her clients and wanted to replace them. I wrote an ad, set up a follow up system for people who responded. All she had to do is run the ad every week.

        She ran it the 1st week. Replaced 20% of the lost clients. I figured, she'd run it for 4 more weeks and have all lost clients replaced. But, she stopped running it after the first week.

        Never gave me a good answer as to why. (I don't know. I got busy with things, is the best answer she's given me.) If I had done it for free, I would not understand her. But she paid me, it worked, she stopped, and I'll forever be baffled.
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  • Profile picture of the author Mwind076
    My answer is a combo - many small business owners open a brick and mortar in a horrible location because "there is a need here for my service/product." They think that because there is no one in their city that offers what they do that there is an ENTIRE city just waiting for someone to open a store like that! No, there is no one with a store like that in your city because they KNOW that there is no market there...not because you haven't graced them with your presence.

    We see the same thing with many "offline" or non store front business owners. The old mindset of "this is a great niche, they just haven't been approached by anyone" is so old and tired. Plumbers and Roofers don't need your video/website/seo package because they don't WANT ONE and are already busy, not because no one has approached them. If you are so hard up to sell to ANYONE, no one is going to want your service/product. Find your niche, work it, be good at it, and you won't have to worry about finding new ones!
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    • Profile picture of the author EricGuimond
      I agree with poor marketing being top reason, followed closely by poor employee's/management.

      I'm sure we've all walked into a retail store and seen the staff more pre-ocupied playing facebook on Iphone or talking to each other instead of doing their JOB, and once you do talk to them they have no clue about product.

      Something as simple as up-selling can make all the difference and I've seen it first hand.

      Lets take a seasonal store for example, a BBQ.

      Mr. Bob walks in and wants a brand new BBQ, the staff sells it to him and only the BBQ and crappy service.

      Now Mr. Bob goes home to setup his BBQ, un-happy with service, and realizes the sales rep didnt sell him everything he needs(BBQ tank etc) Now busy Mr. Bob has to go back and is even more pist then before for waisting his day.

      Lets take example two, now Mr. Bob is greeted by a smart & attentive sales rep, he/she sales him a BBQ, a propane tank, BBQ cooking/cleaning tools, a beer bbq chicken cook, a protective cover and delivery to make his life easier.

      (So typically large items in retail have a small mark up and add ons have(on most cases) a significant mark up compared.)

      Now we've most likelly NEAR doubled our profits while not raising the ticket all that much and Mr. Bob is all set for his summer and a happy customer.

      To make it short, once you have the marketing setup and people in the door having an A team and a proper manager that know how to make the sale and increase the ticket will make all the difference between a team of slackers/dreamers.

      This can be for everything, who likes a rude waitress or receptionest etc?

      TO answer the ops queston, while clearly some things are much more important then others, I've always looked at a business like a puzzle, each piece plays an important part to the success of the business, if you don't have all the pieces to the puzzle the picture will never be complete

      -Eric
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      • Profile picture of the author OnlineStoreHelp
        Here in Hawaii its rent, and everything else trickles down from there. The other part is marketing, but not in the way you think. For example I have one customer, I love her to death, she is good at what she does, her customers love her and we are slowly building marketing and creating Unique Selling Propositions. The sad part is a big box chain opened half a mile from her, has higher prices, poorer services but because they can afford to market more and have support from corporate, she is really hurting.

        The unfortunate thing is, she can't pay me a lot, and she has a hard time hiring quality staff since her rent is so high she cant afford a lot of other things.

        And rent is horrible everywhere here. When I first moved here I was shocked at what was consider affordable rent for buildings that looked like one gust of wind was going to blow them down.
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        • Profile picture of the author Eddie Spangler
          Originally Posted by OnlineStoreHelp View Post

          Here in Hawaii its rent, and everything else trickles down from there. The other part is marketing, but not in the way you think. For example I have one customer, I love her to death, she is good at what she does, her customers love her and we are slowly building marketing and creating Unique Selling Propositions. The sad part is a big box chain opened half a mile from her, has higher prices, poorer services but because they can afford to market more and have support from corporate, she is really hurting.

          The unfortunate thing is, she can't pay me a lot, and she has a hard time hiring quality staff since her rent is so high she cant afford a lot of other things.

          And rent is horrible everywhere here. When I first moved here I was shocked at what was consider affordable rent for buildings that looked like one gust of wind was going to blow them down.
          Step 1-raise her prices

          If the big box can charge more and have worse service YET still crush her then the good news is there is lots of demand.

          No reason to keep charging so little.

          Dont buy into the "cant afford" things BS, help her rise above it!
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  • Profile picture of the author PaulintheSticks
    I think it all comes down to working smarter....and it applies to every aspect of business. It takes a lot of discipline and focus to work smarter though and most people just don't have it.

    So they go off half-cocked and decide to "sell something" without doing their due diligence whether that's working in their particular industry or getting educated about what it takes to run a successful business.

    I would bet that a large percentage of 1st time business owners have never read a book on the subject before starting their business. And that's not the biggest problem. The biggest problem is usually they are not interested in learning which means they're totally hopeless and not worth trying to help.
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  • Profile picture of the author sdentrepreneur
    #1 Reason, they didn't hire me....lol...

    I have been full time with IM Consulting to business owners. Most fail because they aren't embracing technology. Mobile Apps and Websites, Social Media, SEO and SEM. Through in a Content Creation Strategy. The world is changing and they aren't adapting....

    How do you over some this as an offline marketer? You really can't, trying to convince a business owner that they need all of the above strategies is nearly impossible. What you must do is position yourself as expert in this industry, the right business owners witll find you. You can also look for those that are attempting it themselves, Page 2 results and feeble attempt at Social Media Marketing. They will be more receptive....
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  • Profile picture of the author hayfj2
    8. Engagement. (having cut through the clutter.)

    I read 3 good words earlier today - "Legible. Visible. Credible." summed it up for me

    regards


    Fraser
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  • Profile picture of the author DubDubDubDot
    #1 cause of failure for B&M: location location location

    end of thread.
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  • Profile picture of the author RedShifted
    /\ Now thats funny. There is a fish restaraunt down the street from me on a dead end road, out in the middle of nowhere. About a mile away from any highly populated areas. And it is hell to find.

    But that restaraunt is one of the most successful restaraunts in our county. It makes more money than a fish restaraunt located right on hwy 35 in central NJ.

    Location is important, but absolutely NOT the defining factor of any local businesses success. I can think of over a dozen businesses in this area, located in hard to find areas, that do very well for themselves.

    The reason why is people love their food/service/products. They will take a 90 mile hike through the Sahara Desert if your service is good.

    So please people,

    /restart thread

    My 2 reasons:

    1) You service sucks.
    2) You marketing sucks.
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    • Profile picture of the author iMassMarket
      Originally Posted by RedShifted View Post

      Location is important, but absolutely NOT the defining factor of any local businesses success.

      My 2 reasons:

      1) You service sucks.
      2) You marketing sucks.

      Spot on.

      As in my earlier post, restaurants have the advantage in the customer loyalty department if they are well run while serving quality in clean surroundings.

      However, customers of retail establishments will jump ship rather easily. All it takes is well placed advertising on the right products at the right price.
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  • Profile picture of the author Hari Luker
    Lack of true marketing knowledge. So many are comfortable with the 'big box' way of doing things. Radio, bulk mail, TV. Which all works, but they do it through main stream advertising companies that follow cookie cutter techniques and not a direct response approach.

    So many business owners don't truly understand that they should be the main marketing mind behind the company. Instead of hiring a marketing manager that understands more about pointless branding than true ROI.
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    • Having owned and operated 4 successful businesses myself, all offline, I've learned that the no #1 reason why a brick and mortar business struggles.

      They do not prepare for what always comes. CHANGE!

      Because the marketplace is fluid change is always around the next corner, either through new products, different services, start up businesses, bigger businesses, lower competitive prices, newer taxes, cities demographics shifting, different age groups entering the marketplace, change shows up.

      To add to the struggle the business owner/manager believes they won't be effected from change so prudent preparedness is ignored. They reason that their loyal customers won't leave them, because they have always been there for them, so they rest on their laurels.

      So for me #1 is lack of preparedness.
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  • Profile picture of the author DABK
    Why are you posting this? Why are you posting this on other threads?

    Originally Posted by kefczan View Post

    How to Make Social Networking Successful ==>> How to make social networking successful
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