Business Failures

empty high street folkestone

Empty shops in a town centre.

This picture could have been taken anywhere in the UK. A visual reminder that businesses do fail.

Just ask BHS.

Or once familiar retail faces like Blockbusters, the bookstore Borders, Athena, Jessops, JJB Sports, Our Price, Zavvi and Woolworths.

Some of the fallen remain – either having been taken over by other companies or by keeping an online presence – but the list of business failures piles higher every year.

The sight of empty shop units in the High Street remains a feature of Britain today. In some areas more obviously than others.

And you might think it is only parts of the North or the Midlands affected. But this is a myth.

The empty shop units you see here sit at the end of a street in the heart of a town in the South East of England. Just two of half a dozen or more failed businesses in less than 100 yards of pedestrianised precinct.

In the South East of England!

Some people’s view of this region of the UK is that it is just full of rich people. Nothing could be further from the truth. Sure, there are rich people in this part of the country. Some exceedingly rich. But for every person in a multi-million pound mansion there are many, many, many more people living much more ordinary lives.

Many struggling from day to day just to survive. Some parts of the South East are stricken by poverty and deprivation.

Business failures are just a way of life. A symptom of a tough economy.

When money bites there is no room to hide. Those who make and execute plans to adapt and change to the changing markets tend to survive.Those who were teetering on the brink fall over the edge.

On the surface. From the outside. It’s possible to put up a good (shop)front and make it look like everything is rosy. Even when the messy stuff is pretty close to hitting the fan.

Business failures happen.

Take your pick on who or what is to blame. Bad strategy. Rigid business models. Poor planning. Bad buying choices. Unpopular stock. Outdated stores. Culture change. Bad management. Poor customer service. Changes in technology. Changes in human behaviour. Changes in Society…

The list goes on.

And behind the business failures let’s not forget the human side of it. It’s not just about a company going bust or going into administration. It’s not just the loss of another treasured name from the British High Street.

It means the loss of jobs. The loss of people’s livelihoods. Tens if not hundreds of thousands of lives affected. Closures. Redundancies. Lost incomes. Impact on the individuals put out of work. Impact on their families. Impact on their children. Impact on their friends.

There is a huge human dimension to business failures.

And yes, of course, it’s not unusual even in a boom economy to see the occasional empty shop. But when times are more depressed one closure can appear to trip a mini-domino effect. One empty unit. Then two. Then three.

Market jitters. Shopper jitters. The downward spiral begins.

The retail sector is more fragile than we think. We tend to assume the big High Street names will just be there forever. Even when each year we’re delivered a reminder of the reality. BHS is merely the latest in a long line of messengers.

Business failures also make High Streets look like they are failing. And empty shops mean no business rents being paid.

I like towns and cities which have attempted to bring some temporary life to their retail units until a more permanent resident is found. Pop-up shops, temporary exhibitions, leisure trails, treasure hunts and other ideas have worked well in adding some colour and energy to otherwise lifeless spaces.

Business failures are not just in the High Street, of course.

They happen everywhere.

And the equation for success is simple and unflinching. Your income must exceed your expenditure to make a profit. And making profit is what business is for. Even if self-employed or an entrepreneur. Otherwise you’re just participating in a glorified hobby.

Yes, yes, I understand you may want to ‘change the world’, ‘help everyone’ or have ‘freedom’ by being in business to live life the way you desire.

But if outgoings exceed income there is only one logical conclusion – you’ll soon join the ranks of the business failures.

Many reasons why that may happen. Many of those no different from the ones listed earlier for the retailers who’ve snuffed it.

One of the factors is inevitably marketing.

You can have the finest product, the greatest service. But if nobody knows about it they cannot buy from you. No sale, no income, no profit… no business.

Even an average product or service, marketed well has a better chance of success. Which is a shame, don’t you think?

Equally dispiriting is the degree of ignorance around marketing.

Businesses who don’t invest in any because they only view the world in “costs” rather than investment.

Businesses who spend a fortune on marketing yet do not know if it’s successful or not.

Businesses who think they understand marketing but the results would suggest otherwise. And – a bit like elderly parents – they can’t be told.

Businesses who stay in the stuck: confused by Social Media. Overwhelmed by conflicting (and often wildly inaccurate) advice and information out there. Paralysed by fear of what may or may not happen. Fear of what people may say.

Businesses who go full throttle with plans.. and then ruin it by going “fast and cheap” on the marketing. Going “fast food” on the copywriting when what they need is something closer to fine dining.

Science does not lie.

For every action there is an equal and opposite reaction.

That is Sir Isaac Newton’s THIRD Law of Motion. As published in 1687 – almost 330 years ago.

What applied to business, the principle means for every decision made there is a consequence. If you buy cheap you get cheap quality. If you pay more you get higher quality.

Having grand plans for your business and then being a cheapskate when it comes to the marketing or copy is like buying a Rolls Royce and filling the fuel tank with vinegar. Imagine how far that would get you down the road?

It might not end with an empty shop or the close of your business.

But it WILL cost you money in the long run. Research and testing proves that. The legendary marketers and copywriters throughout history demonstrated Рif the product and market are right Рthey could make many, many millions for their clients. (And become millionaires themselves, of course).

When done correctly, marketing and copywriting is NEVER a cost. Because it makes you more – usually many times more – than your investment. It’s a simple value exchange.

Business owners and entrepreneurs who fail to grasp this simple concept are missing out.

I just hope it doesn’t mean they ultimately end up becoming another statistic. Yet another one of those business failures.

We need businesses to do well. It’s good for our economy.

The message is there. If people are willing to listen.

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