According to data from the US Bureau of Labor Statistics, about 20% of US small businesses fail within the first year. By the end of their fifth year, roughly 50% have faltered. And after 10 years, only around a third of businesses have survived.
These numbers aren’t exactly encouraging, especially with today’s economic headwinds. So what can your business do to stand out and succeed?
We sat down with Daymond John, founder of FUBU and star of ABC’s Shark Tank, to chat about what businesses can do to reinvent themselves.
🔑 Unlock Daymond John’s advice for small business owners with this free eBook.
When it comes to owning a business, you can never stop learning. Whether it’s the marketing side or the operations side of your business, get familiar with the ins and outs of your business, competition, and market.
I love bragging that I’m now taking a 28-hour digital course on digital marketing. Why am I doing this though? Is it because I don’t know how to market digitally now? I’m pretty good at that, and I have a team. The thing is, the more I know about it, then the less I have to depend on third parties or other people when I’m looking at other investments or campaigns. And after this, I’m going to take a Facebook course, then an Amazon course, then a ClickFunnel course, and I’m going to keep doing it.
And I’m not sure where that’s going to lead me. It may lead me to understanding the market or a new investment a little bit better. So, you’re going to add this knowledge to your business or your mental Rolodex. It’s about educating yourself, and I don’t care what aspect of education. You just have to keep doing it.
On top of educating yourself through courses and workshops, remember that you can also learn from your teams. And once you’ve gained new knowledge from multiple sources, apply your key learnings to your pivot strategy.
Change is constant, and businesses have to adapt to new scenarios. When brainstorming your pivot strategy, think of ways you can hack your business.
Remember when Netflix used to mail DVDs to your house? The company pivoted and invested everything into streaming. Since then, it’s become of the largest media streaming platforms in the world. Other companies followed suit: Amazon Prime, Hulu, and Disney+, to name a few.
Netflix realized how to hack themselves. But there are big businesses that got too comfortable and didn’t hack themselves. How are Blockbuster, Kodak, or BlackBerry doing these days? We know they’re not around, right? Why? Because they didn’t hack themselves. In order to pivot, you’ve got to hack yourself. Keep punching holes in your business to make yourself better.
If you don’t know where to start, focus on a key feature that your business offers. Build upon your strengths and find new ways to market or improve your key features, instead of spreading yourself too thin with an entire portfolio.
Don’t be scared of customer complaints. Instead, run towards them with open arms and adapt your offering to customer needs or pain points.
Customer complaints are extremely valuable. They’re extremely important, and it’s an investment in your company. A lot of small business owners, I notice, don’t take customer complaints lightly. They don’t just go, ‘Well, we’re not for you.’ No, that’s not the case. A customer, if they don’t complain, that’s the worst thing ever, because a complaint is actually an investment.
Heinz realized that you have to hit their glass bottle five to seven times to get the ketchup out right. By then, you’ve got it on your shirt, your tie, and on the kids. So, they went around to everybody’s house and looked in their refrigerator.
You know what they realized? Everybody had their Heinz bottles upside down in the refrigerator. So now when you go to everybody’s house, they’ve got plastic bottles made to be upside down on the base. As a result, Heinz increased their profit margins dramatically and came back to being number one in the space, all due to customer complaints!
Communication is a two-way street, and when it comes to customers, you need to give as much as you get, if not more.
And with technology at your fingertips—from social media to digital communication tools—there’s no excuse to not connect with your customers and show that you care.
Communication goes two ways. Technology is great, but guess what? Everybody can reach out now. So, you got to beat people to the punch, and you’ve got to really show that you care. And that doesn’t go for just your big customers.
When you’re dealing with social media and you get a bunch of likes, you better like them back. You better follow them back. How would you like to say, ‘Love what you’re doing here!’ And nobody says thank you. You’re going to do that once or twice. After that, you’re going to say, ‘You know what? I love what that person is doing [over there].’ It’s something that you have to give as much as you get.
Find new and existing customers and start speaking their language. Make sure to communicate with your customers more often, whether through social media, video conferencing, phone, SMS, and/or messaging.
As part of your pivot strategy, upgrade to a leading communications system—you want one that is mobile-friendly, reliable, and scalable. One that puts all of your internal and external communications at your teams’ fingertips.
Start building your pivot strategy
As you build your pivot strategy, keep Daymond’s words of advice top of mind. He’s a trusted source, given he’s globally recognized for his relentless commitment to promoting and supporting entrepreneurs.
Remember to continue learning, hack your business, prioritize customer complaints, and communicate frequently. Strategize with these top tips, and you’ll be better prepared for your next move.
Originally published Dec 07, 2022, updated Jan 18, 2023