By Stacy Karacostas

You’ve heard the statistics, right?

Most small businesses fail within the first five years, and half close their doors in two years or less.

Scary.

It’s a wonder anyone ever goes into business with those kinds of odds.

Luckily, you can improve your chances of success. You just have to understand why most businesses fail, then avoid making the same mistakes.

So, why do so many new businesses go under?

For years I’d heard that poor planning, undercapitalization and bad management were the main culprits. And although any of those can easily destroy a business, I sensed there was something else.

Then one day I realized what else might be missing…

Consistent, effective marketing!

And Jessie Hagen of U.S. Bank agrees. According to his study cited on the SCORE - Counselors to America's Small Business Web site, the main reasons businesses fail are:

• Poor Business Planning
• Poor Financial Planning
• Poor Marketing
• Poor Management

Specifically, more than 64% of the business surveyed in the marketing category failed because they did not place enough importance on promoting their business.

Here’s a good example…

Just recently I had two different consulting clients tell me they are not at all concerned with getting new customers.

Yet a quick look at their history showed that any past marketing efforts had produced little or no results. On top of that, their businesses were either losing money or just eking by.

And each was guilty of a major small-business marketing mistake...

One business had fallen prey to “Field of Dreams Syndrome”.

You remember the movie Field of Dreams with Kevin Costner, right? Costner is visited by a voice telling him to build a baseball diamond on his farm. He isn’t sure why, but the voice keeps insisting “If you build it, they will come.”

Long story short, he builds the baseball field and all the ghosts of baseball past (including his long dead father) miraculously show up to play there.

What does this have to do with business success? Well, I’ve seen a lot of people start businesses with a fabulous idea, exceptional product or innovative service and end up making $0. Nada. Bupkus. Many even end up further in debt then when they started.

Why? Because all they did was “build it” and hope for somebody to come and buy it. And since they didn’t really do much—if any—marketing, nobody knew “it” existed, or why they should want it.

My other client was guilty of “Random Marketing”.

Businesses that engage in Random Marketing don’t have any kind of formal marketing plans, strategies or goals. They simply do a little marketing or advertising whenever it is convenient, they have some extra cash, or an opportunity or idea presents itself.

Basically, they just keep throwing #@*$ at a wall and hoping something sticks.

In both cases, the end result was a potentially lethal lack of customers and sales. So what can you do to avoid making these deadly marketing mistakes?

1) Recognize that marketing is not an expense—it is an essential investment in the long-term success of your business. If you don’t do it right, at the very least you are wasting time and money…at worst you are destroying your company.

2) Learn all you can about marketing. The internet is chock-full of useful information, and you can always pick up a book or two from the local library. Check out anything by Dan Kennedy, Jay Conrad Levinson, John Caples or David Ogilvy for starters.

3) Develop a marketing plan. Don’t worry—you don’t have to write the next great novel. In fact, the highly effective Marketing Success Action Plans™ I create for clients are just two pages long. But they take into account your target market, your business and personal goals, your budget, your strengths and weaknesses and a whole lot more. Then they also include a customized list of marketing opportunities, and a timeline for getting everything done.

4) If you don’t have the time to learn about marketing, or are overwhelmed by the idea of creating your own marketing plan (let alone designing and writing your own marketing materials), hire a professional to do the job for you—or at least provide guidance and advice along the way.

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