Bankruptcy to Millionaire

I’ve heard this statistic before. And it seems to come up every now and then: 90% of small businesses fail in their first year…

It’s some absurdly huge percentage like that. The sad reality is a huge majority of small businesses fail in their first year of being in business. (And probably even a larger number of online businesses)

But in all reality they didn’t fail in their first year. They fail on day one. The day most businesses open their doors they’re doomed to fail. Not because “statistically” most are doomed to close. That’s like the guy that brings a bomb on a plane, not to blow up the plane, but rather he noticed statistics showed that it was nearly impossible for two people to bring a bomb on a plane. Much greater than just a single person bringing a bomb on a plane. Therefor if he were to bring one, it’s statistically impossible for another to have brought one on a plane too…

(Hell… with all this “bomb on a plane” talk. I’m probably on the Homeland Security watchlist)

Anyhow their doomed not because of: bad management. Bad bookkeeping. Poor financial backing. Etcetera and so on… Yes this could be a factor. But more likely they fail because they don’t have:

DIFFERENTIATION

You MUST set yourself apart from your competition. Because in todays market, you’re almost certainly going to have some sort of competition.

You MUST give your buyers a reason to buy from you, work with you, or use your product, other than that other guy down the street.

If you don’t, what reason do they have to use you? Because you’re “better”. Because you’re “nice”. No.

And not only do you have to be DIFFERENT, you have to be different enough to be compelling enough to pull your clients away from your competitors.

The first thing most small businesses do to set themselves apart is make themselves “cheaper” than the competition. This can work. But most likely it’s a death wish for your businesses instead think about setting yourself apart by not being cheaper. Brainstorm by starting with some of these ideas:

• Become exclusive
• Offer products or services that are “outside the box” from your normal products (think: the first guy to offer WiFi at his Coffee shop.)
• Expand your product or service line
• Adding a personal touch
• Giving stuff for free
• Offer discounts for products that relate to yours, that you don’t offer (joint ventures, cross promotions)
• Market to the affluent
• Look at what your competitors are doing. Don’t do that. (Note: Use common sense.)

You can get your haircut anywhere. But a salon that offers you a choice of your favorite cocktail, and an iPod with a diverse selection of music gets my vote.

A coffee shop, can sell me a cup of coffee once. But one with internet access will probably get my refill business on the weekends.

I can get my picture taken anywhere. But a custom portrait studio that promises to take more time, and more photographs, indoor and outdoor, digitally enhanced, with photographers that are more experienced than any others in the area… I would pay for that privilege.

If a business can truly accomplish being DIFFERENT enough. It CAN’T FAIL. It can only become a huge success.

If every new business can answer and follow through with their answers to: “What makes me different? What makes me better?”

We’ll see a new statistic soon enough.