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Why do businesses fail?
Why do businesses fail?
Certainly research indicates that lack of capital is one of the reasons.
Another is the inexperience of the founders.
But I believe many businesses fail because of a far more fundamental reason:
They bring nothing new to the party.
Look behind their flashy new websites and grand PR releases and typically you’ll find that most businesses are not different in any substantial way from their competitors.
Their products aren’t unusual, their distribution model is the same old stuff, their pricing strategy is ho hum and their overall value proposition is just more of the same.
The truth is, almost every sector has hundreds more companies than it needs.
If a new company opens that doesn’t offer a significant advantage, why on earth should it survive?
Which brings me to your business.
If it isn’t growing at the pace you want, then perhaps it’s time to take a long, hard look at what you’re offering. If it’s basically the same as everyone else then it’s time to change it- and pronto. Or you could end up in the corporate graveyard.
Why not take an hour this week to brainstorm ways you could differentiate your offering?
Here’s a checklist you can use to help you radically separate your business from the herd:
* Focus on a different customer – older, younger, richer, poorer or in a different location.
* Offer your products in a different way: online, offline, by subscription, by mail.
* Move from business to consumer to business to business, or vice versa.
* Charge much more, or much less.
* Offer the biggest range, or cut your range dramatically.
* Specialize in one tiny niche and be the best in the world at it.
* Create totally different payment terms – lease your product instead of selling it for instance.
* Be extreme in your product’s design.
* Add technology, or remove technology.
* Add features and make it remarkable, or remove features and keep it simple.
I’m not saying it’s easy to radically transform your business, but almost every week I see it being done.
Here’s an example I recently discovered:
It’s called www.runwaybidder.com
RunwayBidder offers women the chance to get high end shoes and bags for 90% off.
That is not a misprint, they actually sell top line brands like Gucci, Jimmy Choo or Chloe for a whopping 90% off.
Understandably with a promise like that women all over the world are jumping on the site.
The big question is, how can they make any money with that model?
Well pretty easily as it turns out.
They auction each item like many fashion websites, but they have one primary difference: they charge you money to bid – about 70 cents each time.
So even though they may sell an $1800 bag for only $200, it’s still highly profitable for them.
Now that’s smart.
So if RunwayBidder can revolutionize one of the most competitive industries on the planet, so can you.
And I urge you to do so, because if you’re not offering any special, your chances of building the business you’ve dreamed of are slim.
They say that ‘Fortune favors the brave’.
I think it favors the different.
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