Find out why most virtual assistant businesses fail and learn how you can avoid going out of business. Keep reading...
You started your virtual assistant business and now you're wondering what you get yourself into?
Have you ever wondered how many businesses fail either in the short-term or the long run? Unfortunately, in general, business failure is common. Statistics show about 20% of small businesses fail in their first year, and sadly 96% of businesses will fail over a 10-year period of time.
As for the remaining 4%, it does not necessarily mean they succeed – it means that they’ve survived. This post will answer these two questions: 1) Is your business doomed for failure? 2) How can you ensure its survival and success?
Let's dive in!
Why Virtual Assistant businesses fail
What makes one virtual assistant succeed while another experiences business failure? It all boils down to a combination of organization, preparation, strategies and expertise.
One of the top reasons why virtual assistant businesses fail is that they fall in love with their business instead of their clients. There is absolutely nothing wrong with falling in love with your business, but only after you've done the work and built it to success. Falling in love with your business before you even secure clients is dangerous. To avoid business failure, fall in love with your client and figure out every single way you can meet their needs. This will help you build a successful thriving business, if the foundation is built with your clients in mind.
How to avoid going out of business
1. Don't be afraid of failing; and fail fast
Business failure is one of the main, if not the biggest, fears of any business owner. If it weren’t for that fear, we wouldn’t even be asking, “Why do businesses fail?” However, as you develop your entrepreneurial and managerial skills, you will find that one of your greatest assets in running a successful business is overcoming your fear of business failure. Without minimizing the validity of your fears, you need to learn to view business failure as a learning opportunity rather than an insurmountable obstacle. Remember, life happens for you, not to you.
2. Develop the RIGHT mindset
One of Tony Robbins’ central philosophies is that our mindsets create our realities; what we believe influences what we are able to achieve. As entrepreneurs, when we embrace strategies for turning business failure into success, we transform our mindset from one of defeat into one of empowerment. And when we are empowered, a failing business is not the concluding chapter in our story; it is only the beginning. Don’t let your limiting beliefs disempower you. Instead, stay hungry in your search for success. Your hunger will inspire you and pay off in the end.
3. Create your vision and set realistic goals
Marketing guru Jay Abraham understands the question of why businesses fail. It’s a high-velocity and high-leverage mindset that prepares business owners to navigate the ever-changing seas of business. Rather than adapt your dreams to the economy, you must set and achieve your own goals, independent of circumstances. How can you accomplish this? By recognizing that business success hinges on loyalty to a vision.
4. Create an effective business plan
If you don’t have an effective business plan, you can’t properly communicate your vision to your team. Tony Robbins advocates not just having a business plan, but having a business map for entrepreneurs to take their small businesses to the next level. Your business map will help you master vital stages of the business cycle, like scaling. Explosive growth can be tempting, but not scaling in a mindful manner is one of the biggest reasons why businesses fail – you have to strike the right balance between growth and infrastructure.
5. Create marketing strategies that work
Whether your company is large or small, marketing is the next critical step. Why do businesses fail in their operations? If you cannot find a way to market your product or service, then your business will have a hard time getting off the ground. Because the truth is, you could have the most innovative product or service, but the best product doesn’t always win. Do you think McDonald’s has the best burger? Probably not. But their marketing strategies are top-notch.
6. Understand your value proposition
To market effectively and prevent business failure, you have to understand what your “X-factor” is. What are you here to deliver and how can you improve your customers’ lives? Take, for example, FedEx founder Fred Smith. Even in FedEx’s early stages when profits were slim, Smith invested in three market studies for testing the value expedited shipping would add to his product. Smith’s research paid off: He discovered his X factor and FedEx is now a household name, in large part due to its corner on the market via expedited shipping.
7. Ask the RIGHT questions
You're on a discovery call and the questions you are asking aren't giving you enough insight on the person or the business. They've called you for answers to how to do what you do. You start to share all of your tips and tricks and exactly how you're going to complete the task. you even give them tools and resources you use. The call ends and you never hear back from the caller again. Why? You've already told everything they need to know to do the job themselves or hire someone they can teach to do it cheaper.
The minute you start giving away all your bread and butter, you lose your value. Why do they need it now? To help discover what your true value is as a business owner, before you start working with clients, ask yourself the right questions. This includes core questions like: What does the marketplace need? Who is my ideal client? What can I do to make my company untouchable and different? And perhaps one of the most important questions you can ask yourself is, “What business am I really in?”
In order to become a wildly successful company you need to ask yourself that very question.
8. Put your clients first
One of the top reasons why businesses fail is that they fall in love with their product instead of their customer. To circumvent business failure, fall in love with your client and figure out every single way you can meet their needs. Anticipate what they want, what they need and, when possible, determine what they might not even know they need yet. Turn your customer into a raving fan – somebody who will tell everybody about your product or service or company. Once you grasp that your customer’s life is your business’ life, you can truly envision how to succeed.
9. Don't do it all by yourself
Yes, you are an entrepreneur, but that doesn’t mean you have to do everything on your own. A business is only as strong as the psychology of its leader – and the ability to let go and trust others is an essential leadership trait. If you need to control everything, it’s likely you won’t succeed over the long term. Delegating is a top skill to manage a business effectively: it helps you manage your time, focus your energy on what matters most and spot potential up-and-coming leaders within your company.
10. Be more flexible
Remember Blockbuster? Radio Shack? Tower Records? These giants of their industries all fell victim to the same reason for business failure :inability to adapt to a changing market. Entrepreneurs who fall in love with a service or product and refuse to change directions when the market demands it are likely to fail. The key to long-term success – in business and in life – is flexibility and a willingness to pivot when necessary.
11. Be more innovative
Peter Drucker and Jay Abraham, among the greatest business minds of our time, maintain that business failure – and success – all starts with two key factors: innovation and marketing. Innovation means finding a better way to meet your clients’ needs than anybody else. Anybody can make some money for some amount of time. But if you want to become successful and sustain that success over years and over decades – if you want to build a brand – then you have to find a way to add more value than anybody else in the game. And that comes from constantly innovating.
12. Become an expert in your industry
This is one of the driving factors behind why businesses fail to innovate. Certain industries require more innovation, while others may have different product life cycles. Consider the technology industry. The life cycle on an average product is about six months. And in some sectors, like the app business, it’s just one month. People expect continual innovation and improvement, and if you don’t deliver that to them, someone else will. It’s a different world we live in today, where the only constant is change. And if you aren’t staying ahead, you’re falling behind.
13. Build a team or hire the right people
Hiring the right people has a massive effect on nearly every area of your business. One of the most obvious examples is sales: If you don’t have enough sales, you can’t pay your team or yourself and you cannot grow. Confident salespeople are a key to increased sales. It’s also astounding how many businesses fail due to client relationship mismanagement. Hiring someone who is skilled at client relationship management or using a good client relationship management software is an easy way to solve this issue.
14. Love what you do
A passion-driven mindset lets you persist in honing your ethics and beliefs while learning from all the reasons why businesses fail. By adhering to your passions, you’re able to see your circumstances clearly – the positives and negatives. With this level of focus, you create an unstoppable drive to accomplish your goals. This focus allows you to take risks, acknowledging that feelings of doom and failure arise not from circumstances but from feeling stuck in the status quo. Don’t get stuck – persist.
Is your business failing? Do you feel like you're not going to make it as a Virtual Assistant business owner? In my next post, I will share how to come back from business failure.
Join our 22 Days to Slay Your VA Business challenge to help your business come back from failing. Learn more about how to market your business here