Discover the 5 scary small business statistics of 2023. Don’t let these haunting trends spook your entrepreneurial dreams. Learn more now and take action!
The SBA defines a small business as an enterprise having fewer than 500 employees. There are 33.1 million small businesses in America and they employ 61.7% of Americans according to a data from the SBA’s Office of Advocacy. Between 1995 and 2021, small businesses generated 17.3 million net new jobs, constituting 62.7% of total net job growth during that period. Some interesting statistics indeed. In the spirit of Halloween and all things spooky (do you have your costume yet?), here are 5 scary statistics about small businesses and some thoughts on how you can overcome them.
45% of small business will fail in 5 years. Information services businesses have a 37% survival rate.
According to data from the BLS, the odds are stacked against new businesses, with roughly 20% failing in the first two years, 45% within the first five, and 65% within the initial decade. Merely a quarter make it past the 15-year mark (source: Investopedia).
While thorough research and adequate funding are essential, success hinges on more. Prioritize customers with problems your business can solve and truly understand them. Stick to an industry where your expertise shines, capitalizing on your talents. Build a strong team, manage resources wisely, and be willing to take calculated risks. As Ray Kroc, McDonald’s founder, aptly put it, “If you’re not a risk-taker, you should get out of business.”
For every month that a business does not communicate with their customers, they lose 12% of their influence.
According to the 2023 Communication Statistics Report, 12% of businesses have lost customers to competitors due to communication problems within their operations. The truth is, most companies only talk to their customers when they want to sell them something. However, social marketing budgets will double over the next 5 years, so it appears that some companies are paying more attention. Consider setting up a methodical marketing plan that automatically sends information of value to your current customers to reinforce your brand. Send out weekly blog posts of interest in your field. Offer incentives for visiting your site often. Do what it takes to keep in touch with your customers as often as you can to ensure you’re at the forefront of their mind the next time they need the product or service you provide.
42% would quit brand after 2 bad service experiences
According to Gladly’s 2022 Customer Expectation report, 42% of customers stated that they would discontinue purchasing from a brand after encountering just two instances of poor service. This highlights the critical role of customer experience as a competitive advantage. Jeff Bezos emphasizes the importance of continuously improving the customer experience, viewing customers as valued guests. Exceptional customer service not only distinguishes a business but also rivals the impact of sales and marketing efforts. Effective customer service can enhance overall team performance and lead to easier sales, as well as generate positive word-of-mouth marketing, a powerful endorsement in itself.
The average company loses 50% of its customers every 5 years. The cost of replacing them can be 6-7 times more expensive.
A common problem is companies who are too busy trying to get new customers to come in the front door that they let existing ones leave out the back door. The message is pretty obvious: Focus on your existing customers as much as you do reaching new ones. Implement simple customer appreciation programs, offer perks for long-time customers, seek their input and let them know you value them. And of course, provide the most amazing service so customers have no reason to leave.
50% of millennials use their smartphone to research products and services.
If you’re not on mobile somehow, get on it! Optimize your website for mobile users. The easier it is for smartphone or tablet users to view your site, the more likely they are to make a purchase or leverage your services. According to Brian Alvey, chief scientist at Ceros, a cloud-based real-time web content authoring platform, “Mobile used to be the future of business. Mobile used to be a trend. Now it’s the norm. If you don’t adapt to mobile and quick, you could miss out on a prime revenue-generating opportunity, or even lose customers to competitors who already embrace mobile.”
Scary statistics but they don’t have to be. Learn from the numbers and make the necessary changes. Good luck out there and have a safe and happy Halloween!