Running a business isn’t for everyone. In entrepreneurship, risk is always part of the process. For someone who wants to succeed in business, having the ability to manage risks while providing customers with quality products or services is a must. Customer relationship, among others, plays a fundamental role in the overall success of any business. Given such importance, investing in a reliable Customer Relationship Management (CRM) strategy is necessary.
According to the Small Business Administration (SBA), roughly 80% of all small businesses survive the first year. However, only about half of these businesses survive five years while only one-third survive 10 years or longer.
Businesses, regardless of size and industry, are indeed faced with multiple challenges. In most cases, these problems include finding new ways to grab customer’s attention, discovering powerful strategies to increase productivity, efficiency and sales, and uncovering efficient techniques to keep customers coming back.
Top 4 Reasons Why Small Businesses Fail
Although there are tons of small businesses that are performing well in various industries, the total number of businesses that have failed and are continuously failing cannot be ignored. But why exactly do businesses fail in the first place?
To safeguard your startup business against possible failures, it is essential to understand the root causes of these problems. This will help you develop your own tactics as to how you can manage these obstacles and how you can avoid them from happening.
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Lack of funding
One of the most common reasons for a business to fail is the lack of funding. Running out of capital is one of the biggest risks of entrepreneurship.
In most cases, business owners are well-aware of their companies’ expenses. They know exactly how much they need to keep the business running including the overhead costs and payroll funding. However, some owners are uncertain as to how much their business is actually earning. This often results in financial shortfalls.
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Inefficient business planning
An effective business plan plays a vital role in the long-term success of your business. Unfortunately, it is not something most business owners pay much attention to. A well-structured business plan often includes:
- A clear and concise definition of the business
- List of current and future employees and management needs
- Possible opportunities
- Possible threats
- Capital needs
- Competitor analysis
- Marketing plan
Setting up a sound business plan is necessary even before the operation begins. Without this in place, you are likely to face insurmountable challenges throughout the existence of your business. Furthermore, failing to review your initial business plan and adjust it depending on the growing needs of your business, the market or the industry can also put your enterprise in jeopardy.
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Poor management
In most cases, small businesses begin with only a few senior-level people juggling administrative duties and critical tasks. While these people are skilled enough to make a sale, they lack the necessary attributes required to effectively manage employees. Without a professional management team, a business is likely to fail in various aspects such as recruitment, finance and marketing.
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Bad customer service
Customers are the heart and soul of any business. As such, understanding their needs should always be your top priority. Failing to understand them as well as neglecting their feedback is some of the common causes of business failure.
3 Ways CRM Can Help Your Small Business
In order to grow and succeed, investing in areas that provide the highest dividends is a must. Customer Relationship Management (CRM) software, for instance, can be your best bet.
A reliable CRM system can help you build a stronger connection with your customers, improve business performance and achieve business success.
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Helps you understand your customers
To serve your customers the best way possible, you have to get to know them better. Identifying their needs, wants and pain points can be of great help in this matter. With CRM, you can easily and automatically gather relevant information about your customers. Through the use of this data, you can easily track trends, assess customers’ behavious and even identify new opportunities.
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Eliminates manual data entry
A reliable CRM software helps eliminate common human errors often associated with manual data entry. By automating data entry, a CRM system allows you to create a more detailed profile for each of your customers. What’s more, a good CRM features duplicated checking intelligence that ensures no contact details are duplicated and each customer has only one profile in the system.
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Consolidates all data into one location
A CRM software consolidates all your data into a single, easy-to-access location, allowing everyone in your company to access the necessary data in just one platform.
A reliable CRM system usually includes contact information such as your customers’ email addresses, contact numbers, websites and social media accounts, as well as customer history where you can track their order history.