Ep 84: How to Avoid the #1 Reason Businesses Fail
Ep 84: How to Avoid the #1 Reason Businesses Fail
In this episode, I talk about a framework I created (and recently won an award for!) called the Dynamic Digital Marketing Model. Within this framework are eight powerful ways in which to market your business online to scale and grow.
This week I discuss the #1 reason businesses fail while starting a business, with 82% of small businesses failing due to cash flow, it’s important to discuss how to avoid this and to grow your business successfully.
If you want tips and tricks on how to keep your business afloat, in these chaotic times, this is the episode for you..
|Did you know that my podcast Dawn of a New Era has reached the top 3% most popular shows out of 2,249,182 podcasts globally, ranked by Listen Score?… 21 months and 84 episodes in – SUBSCRIBE NOW
Here are the highlights:
(01:24) Dynamic Digital Marketing Model
(03:29) Number one fail
(04:53) Cash flow
(08:38) Managing money
(15:15) Things take time
Welcome to Dawn of a New Era, a business and marketing podcast with a difference, ranking in the top 5% globally, for people who want to start, scale, and grow their own business. Dawn McGruer shares tips to improve marketing, motivation, and mindset, as well as her own real life challenges and experiences as an entrepreneur. Guests include some of the world’s most inspiring leaders too, so if you are an aspiring, established, or serial entrepreneur, this is your go-to podcast to fast track results and rise to meet today’s challenges, and master the art of online influence and business success, and avoid common pitfalls along the way. Never miss an episode and subscribe and listen at dawnmcgruer.com.
Welcome to Dawn of a New Era. We are fast approaching that 100 episode milestone, so thank you very much for joining me on the podcast with myself, Dawn McGruer, digital marketing speaker, author, and trainer, and this week marks a really special week, because I have just won an amazing award recognizing a huge accolade in my business. And this accolade is around a model, a framework that I actually created called the Dynamic Digital Marketing Model, which is eight powerful ways to market your business online to scale and grow.
Dynamic Digital Marketing Model
Now, this model actually formed the whole basis of my bestseller book published by Wiley, Dynamic Digital Marketing, and I’m super proud of this because this framework I teach across my courses, my signature Fast Track digital marketing course, and this certification, we’ve trained thousands and thousands of people on using this framework, it’s in my book, it’s in all areas of my business.
Now, I’ve got an academy, Business Consort, that I started way back in the early 2000s, and it’s Chartered Institute of Marketing accredited. We do courses, we do qualifications, and it is a core part of what I do, because it started because in my agency I was writing strategies, creating plans for businesses, but the biggest gap was skills, it was the talent, the training, people not actually understanding the specific tactics to implement strategy. So this whole framework has kind of created a business itself.
Now, this accolade, I won this award was at PSA. Andy Harrington hosts annual awards for the Professional Speakers Academy, and back in 2018, I won Best Female Speaker, I won Solution Framework of the Year for my model, and since then I’ve gone on to publish my book. Andy actually has written a testimonial on the back cover, and he’s been part of my journey. Now, he has seen me use this model to drive my business and to actually attribute over seven figures to this model, and actually generate that revenue for my business.
Number one fail
Now, this award was for Seven Figure Achiever, and I was super proud, super proud to receive it. Now, this links really well with this episode, because we’re going to be talking about the number one fail in business, and this is something that I learned kind of the hard way. And when I started my business first at 21, I was super keen, really motivated, I thought I was going to dominate the world and life was going to be a happy place. Didn’t quite go like that, because my first initial months were a bit like feast and famine, and then that went on for another 18 months, and really it wasn’t until my second and third year that I’d actually kind of figured out how to run my business, and I fell into this trap. The biggest fail in business is that you create something, product or a service for your business, and you create a business model that doesn’t work.
Now, you might be thinking, “Well, it’s quite hard not to create something that works if I’m passionate about what I do and I create it and people buy it.” The problem is that you may achieve a level of success like I did, where people would buy, and you’d think “This is working,” but then you would have a big gap of cash, and cash flow problems mean big problems. Mentally, they are one of the biggest stresses and strains in relationships, I mean, in all aspects of your life, okay? So I soon figured out that my business model, there was something not quite right, but what I hadn’t kind of nailed was what was wrong with it, and why wasn’t it working, and why was I having huge cash flow problems in my business?
Now, 82% of small businesses fail due to cash flow. That’s high. And most small business owners agree that cash flow is this number one risk that they face, because really it’s everything in your business. You can’t invest in yourself, you can’t invest in things you want to do to grow your business, it kind of puts you in a halt position, and you stall. It affects your confidence, it affects the whole way you see your business, and you start to think, “I haven’t got a proper business, it’s failing.”
Now, if you think about how your business model is structured, let’s think about some of the biggest businesses that have failed. You’ve got Blockbusters. They were someone from my childhood, I remember going to collect a video, and it was kind of an outing. It failed. BlackBerry failed, Kodak failed, Myspace failed, so many businesses. Now, what happens is that when the model fails, then generally it impacts on cash flow. So when I talk about a model failing, what do I actually mean? Well, let’s focus on how I figured out, took me a while, why my business model was never ever going to work.
So I started my business running an agency helping people, needed support with marketing who didn’t have an in-house resource or a dedicated team. Thought I’d absolutely nailed it, selling my services one-to-one, creating projects and proposals, meeting all the time, and I was absolutely burnt out, exhausted, overwhelmed, and very cash poor. Now, why did I realize my business model was failing? Well, I realized I had a feast and famine situation, so if you’re in that, we’ve all been there, it’s nothing to be ashamed about.
And I think the thing is that you have to understand that you have to make mistakes in business, so do not hold onto these, embrace them as the best learnings you’ve ever had, and be prepared to fully own it and walk past it, because I could look back on my business life and I could really, really be hard on myself. I could probably cause myself some real, real issues with my mental health if I dwelled on some of these things, because I have made some epic failures. I’ve had some blooming marvelous successes along the way, but you have to kind of step past it and think, well, if you’ve had a cash flow problem, great you fixed it, well done to you.
So when you look at your model, my biggest advice is to map out a 90-day plan and try and figure out the days that you’re actually working with clients or delivering services, or whatever you do. Now, if you have products, again, you have to kind of work out what your targets are.
Now, just this week I was delivering my first session of the cohort for the CEO Strategy School. Now, CEO Strategy School was developed basically because it fixes the problems that I had when I started my business, it helps businesses scale to consistent cash flow months. It’s a four-week online program, something I’d really wished I’d had when I was starting my business, because I hadn’t got a clue. I was passionate about what I did, but I didn’t really understand what stepping up as a CEO was. I didn’t really understand what was going to move the needle in my business and how to focus on that to grow, and I really didn’t understand how to get clients and get this consistent cash flow. So I did a lot of work on creating models, and I got students this week to create and fill out their Magic Model spreadsheet, and it is a Magic Model spreadsheet because it identifies where the issue is in your business.
Now, what it does in particular is it focuses on what amount of money do you need to scale and grow your business, okay? That means paying all your bills, paying you, and living a nice life, not living on the breadline, but in a way that will allow you to go on holidays, buy the things that you want, invest in the things, right? So this is not a scarcity number, this is a certainty number of “Right, this would make my business, my dream, achievable, sustainable, and I would love my life, I would see myself as a success.”
So once you get clear on that number, you start to think about, “Right, well, what are my three core offerings, these three products that I’m selling, or services?” And then you start to think about, “Okay, well, in each month, how many customers do I need?” And you start to look at your pricing versus how many people you think you need, and you start to then get a figure, a revenue figure of what your target, your forecast would be. And then you start to look at “Does that match what my certainty number is?” But most importantly, is it achievable?
Now, in my business model, initially back at 21, my forecast was never going to be achievable because there was only one Dawn. I didn’t have a team of 17 like I do now, I didn’t have any other support, it was me showing up in my business, doing blooming well everything, okay? So there was an unrealistic expectation that I was going to be able to work like 37 hours a day, I was going to be able to have clients five days a week, and I had to really kind of start thinking, “Well, where are these people coming from?” It’s all very well putting on a spreadsheet, “Oh my goodness, those numbers look fantastic, I’ve got target five, they’re all paying me X amount of money, I’ve hit my certainty number.” But you have to think about where do these people come from? Where do you get them from now? Is it achievable?
Now, when I look at people’s models, instantly when they say, “Right, okay, I’ve just got to get 20 new customers,” 20 new customers in one month is some amazing feat even for the most seasoned professional. It depends what you’re doing. Having a launch or something, that’s fine, it’s feasible, but you’re not going to launch every single month, so you have to think about realistically, how many clients do you need? Now, in my current model for dawnmcgruer.com, my consultancy, I develop strategies, I have the CEO Strategy School that I teach, I work with people obviously one-to-one, and I do things like VIP strategy days and retreats.
Now, I have a very kind of simplistic model, three things I do, you’re either coming to work with me one-to-one or in a group in my Marketing Mentorship, and that includes obviously the Strategize and Energize Retreats, people can come on those individually. And then the second thing is obviously the CEO Strategy School, four-week live program for people who are in that growth point and who really want to kind of get the foundations right in the business to be able to start getting consistent cash flow months, and to really kind of ramp up the systems and things in the business to get the structures in place.
Now, as far as obviously that goes, people are either going to work with me one-to-one or in group, they’re going to come on CEO Strategy School, or they’re going to come on a retreat. So I know in those models what I charge and what is recurring, so what’s actually coming in each and every month, and for how long. Now, for me, obviously I have the CEO Strategy School, it’s a one-off purchase, and then I have the retreat, again, a one-off purchase, and then I have the mentorship. The group mentorship program is 12 months, and that’s recurring. And again, one-to-one is 12 months, and that’s recurring.
The only other thing above that might be a VIP strategy day as a one-off if someone wanted to do that, but it means that I’ve got a mix of repeating revenue, recurring, as well as one-off. Now I know that I only need 42 clients in a year. Now, you break that down, it’s not that bad in terms of obviously what I’ve actually got to achieve. Now, I’ve seen some people’s models where they’re looking to achieve that amount of people over a whole kind of month. So that’s like me getting maybe three or four clients a month, that’s it, and that gets me to my certainty number, and slightly above.
Now, my business is scalable, it’s global, and certainly is a very different entity to when I first started my first agency. Now, I have three businesses now. Have the agency, the academy, and I have my dawnmcgruer.com consultancy. Now, on the academy side of things, again, we have three core items. Now, the reason I’m telling you this is that once you get your model nailed and you have the right balance of offerings, let’s say you have three things, and you have a balance of one-off versus recurring. Recurring is the fastest way to scale because it gives you the certainty, it gives you those solid foundation months, you know that projected for the next three, six, or 12 months what money you’ve got coming in.
Now, the epic fail I did is that I was working on a one-off model, so I was having to find new clients all the time, and then I sort of moved into a recurring retainer in my agency, and that start working very well, but then I kind of ran out of time. So once I’d scaled to that point, I didn’t really have anywhere else to go, and this was a mistake I made because then I was in a feast and famine, because I would have people who would work with me for maybe three, six, or 12 months, but then I’d have to replace that person, and spend time and effort trying to do that, but I couldn’t ever get past the growth number I was on. So I had to think outside the box, and this is when I started in my agency the Virtual Business Partner program, and it was a group program. So I started to be able to add in recurring revenue again, working with more people, and instantly my business started to scale.
Then I started the academy and started doing training, again, one-off where people would book onto a course or a qualification with me, and people might start coming back and doing other things, but then I added in the mentoring into my academy, where people could join my Marketing Mentorship, or they could work with me one-to-one. And then from there, it’s evolved into my consultancy, obviously where I’ve got my retreats, still part of the Marketing Mentorship, and I’ve got the CEO Strategy School, so I have a mix of different revenue streams coming in. Now, bear in mind, I’m 43, it’s taken me a long while to get to that point. I’ve grown my business slowly and organically. I’ve made some mess-ups along the way, but it’s all been down to the right model.
And I know that when I look at my business, and I know that when I look at why I got that award this week, it’s all to do with the structure. It’s knowing that I had the right offerings that had demand, I had the right market, I had a route of attracting and converting clients. And this has been the biggest thing, through meeting students on the CEO Strategy School, the biggest thing that business owners are saying is that they don’t have a clear route of sales pipeline and lead generation, and I think, again, this is a bigger part.
So I suppose it’s twofold. When you look at the epic fail in business, the number one reason businesses fail is that if the model’s not right and then there is no attraction and conversion process, then cash flow is always going to be the issue, and cash flow will kill a business if it’s not there. Anyone who’s been under any monetary financial issues, and I think we can all relate to that, then you know how much pressure that puts on.
So my biggest advice from this episode, and I really, really hope that you will look at this, is just to start looking at your business model and think about the viability. Think about your pricing. Think about the number of people you need per month. Where do those people come from? How do you attract them, how do you convert them, and what is your certainty number? Remember, your certainty number is the amount of money that you want to have a good level of life, a level of life that you started your business to achieve, not scraping along and on the breadline, but having a number that pays you a good amount of money, that allows you to do the things you wanted to do. And remember, you started your business for probably freedom, flexibility, financial certainty, and you need to focus in on those three core elements, and be truthful to yourself. Does your business model work?
So to find out more, please feel free to reach out with me on social media, Dawn McGruer, all the normal social media channels. You can find me on dawnmcgruer.com. Lots of helpful resources and guides and things, as well as workshops that you can do to find out more, and again, you’ll find out ways of working with me there. You can see our business model by clicking on “Work with Dawn,” and you can see the structure of what we have in there. That gives you an idea of obviously what I’m talking about in terms of one-off versus recurring as well. So I will see you on the next episode, and thank you so much for joining, and don’t forget, if you enjoyed this, I would hugely, hugely appreciate if you could just give me a quick rate and review on the podcast to allow other listeners to find this podcast too. Thanks so much.
Thank you for listening to Dawn of a New Era Podcast, and for your free checklist to find out how to boost your business for growth, profit, and success, and join our community, go to dawnmcgruer.com.
|Remember to join me and all my Podcast Guests on Facebook
Dawn McGruer's Marketing * Motivation * Mindset Group
Speaker. Author. Podcaster. Strategist.
Multi-award-winning speaker, strategist & best-selling author of Dynamic Digital Marketing - Helping to inspire entrepreneurs to rise to meet today’s challenges and be powerfully present to shine online.
SHARE ON SOCIAL MEDIA