How to Harness Technology to Avoid Failure in Business

  • IT Innovations , Risk Management
  • 22.06.2022 10:47 pm

Picture Source: Pixabay

Creating a business is tough but maintaining a business and making it successful is even tougher. According to Business 4 Beginners, at least one in five (20%) start-ups fail within their first year. By year three, more than 60% of new businesses have failed. That doesn’t mean you’ll fail. What it does mean, however, is that success can be hard to come by and that surviving, based on the statistics, is tough.

There are many reasons why start-ups can fail. CB Insights asked 101 founders and employees of new companies why failures occurred. 42% said that start-ups fail because there isn’t a market for the product or service they’re offering. 29% also pointed to cash flow issues, specifically that the company ran out of money. Delving further into the reasons why new businesses fail, 18% of those surveyed pointed to pricing problems, while a further 17% said the lack of a business model caused start-ups to fail.

If we remove the fact people aren’t interested in, or don’t have a need for whatever a start-up is selling, we can see that failure typically involves money. It’s either a lack of money, overspending, poor management, or a combination of all three. Entrepreneurs aren’t always financial experts. They might be money-minded in the sense they want to create a profitable business, but they’re not necessarily blessed with an accountant’s brain.

You Can’t be an Expert at Everything

Indeed, Elon Musk has famously said on multiple occasions that he’s just an engineer. He may have some understanding of how businesses work, but his primary skill is solving problems and designing things. What he has done, however, is employ the right people and harness the right technologies to create some of the biggest companies in the world. Therefore, as a start-up or small business owner, the lesson here is that delegation is important.

Delegate money matters to people and products built for such things. Let the administrators handle day-to-day tasks. Let the marketing team promote the product or service. The list goes on, but the fundamental message is the same: invest in talent and use this talent to grow your business. Before the advent of digital technology, help used to come in human form.

Three Pieces of Tech that Can Make Your Business Better

Today, you can run and manage a successful business with fewer people thanks to computers, software, artificial intelligence, and other clever creations. So, we’ve laid the foundations and explained why it’s important to invest and delegate in business. Here are three ways you can use technology to help avoid becoming one of the 20%:

Money Management Software

As mentioned, money matters are often at the heart of a start-up’s demise. To this end, it makes sense to utilise modern money management systems. Moss, for example, can collate and organise company spending into a single product. From virtual corporate cards that allow you to centralise spending and track expenses in real-time, to invoicing and the ability to analyse cash flow, the software performs the job of an entire finance team.

That doesn’t mean you can dispense with every financial expert in your business. However, from £9 per month, all-in-one expense management for businesses makes it possible to handle all aspects of a company’s finances with just a few employees. And, with the option to run analytics via the platform, it’s possible to avoid many of the pitfalls new businesses often succumb to in their first three years of operation.

Digital Marketing Software

Advertising your products or services in the digital space is harder than it used to be simply because there’s so much noise online. However, with the right software, it’s still possible to break through and generate some hype around your business. What’s more, it’s still cheaper to advertise online than it is on TV, for example. Although costs can vary, an article published on Toast presented some figures. According to the article, online adverts can cost as little as £50. For a spot on TV, it can be around £4,000. However, what you also have to factor in is the cost of creating a TV advert.

From actors and music rights to production, it can cost upwards of £50,000 to create a TV advert. We’re not saying the investment isn’t worth it. Toast’s article notes that the average return for every £1 spent on a TV advert is £1.79. However, you’ve got to have the money to make an advert in the first place. Most start-ups and small businesses can’t afford to do this. That’s why it can be useful to invest in modern marketing software such as Sprinklr. These products deliver messaging and analytics at scale, so you can track which adverts and social media posts are hitting, and which ones are missing.

Customer Relationship Management

Once you’ve got an active customer base, it pays to keep them happy. Indeed, it’s far cheaper to retain an existing customer than attract a new one. In fact, according to data from Invesp, attracting a new customer costs five times more than keeping an existing one. Despite this, 18% of company owners surveyed by Invesp said they focus more on retention than acquisition. Therefore, not only will focusing on customer retention help reduce costs and increase the chances of your business surviving, it will put you ahead of other companies that aren’t focused on it.

The key to retaining customers is understanding what they want and, today, thanks to customer relationship management (CRM) software, you don’t even need to ask them. Of course, getting direct feedback is still important. However, you can use a CRM to measure contact data and online behaviours. From the number of clicks your emails receive to reports on hot vs. cold customer demographics, you can use technology to understand what people are responding to.

Don’t Be Afraid to Invest in Technology

You don’t have to be a financial expert or a marketing guru to run a business. As long as you’re willing to invest in people and technology, you can delegate. If you can delegate effectively, you can focus on what you do best and maximise the potential of your business.

Surviving will always be tricky in the first few years, which means thriving is an even tougher goal to achieve. However, modern technology can help. As long as you use the right people and products, you can avoid becoming one of the 20%.

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