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According to the Small Business Administration, 30 percent of businesses fail within the first two years of operation. However, 50 percent do not make it to the five-year mark. There are a number of reasons for this, with one being the loss of a key figure within the business.When there are few employees in an operation, losing even one can be detrimental. When it is a key person in the organization, the business might not be able to survive. For this reason, every organization regardless of size should consider investing in keyman insurance. How can a business reduce the risk of failure?
Know the Market
First, an entrepreneur needs to know his or her market. When opening a business, a person needs to find an unmet need within the local market and work to fill it.
Men and women often choose a saturated market thinking they can have great success because they have a better way of doing things. They quickly learn that trying to force the product or service into a crowded market simply does not work. Work to satisfy a need rather than creating one and the customers are more likely to come.
However, as there aren't as many people who can step in for key individuals within the organization when a specialty is selected the need for keyman protection increases. My Keyman Insurance (https://www.mykeymaninsurance\.com/about-us/) can be of help with this.
Customer Engagement
Businesses need to interact with their customers to know what they want and need. Actually, customer experience is quickly overtaking price when it comes to customers.
PWC did a study that found that consumers are willing to pay 13 percent more for luxury services or indulgences if they are accompanied by a great customer experience. Furthermore, 49 percent of buyers make impulse purchases when they feel a company offers a personalized experience. Businesses need to recognize this and know what their target audience considers a great experience to fully benefit.
In fact, a study conducted by Walker found that by the end of 2020 price and product will no longer be the key brand differentiator. It will be the customer experience that draws people in and has them coming back for more.
Rapid Expansion
When a business quickly takes off, it's time to expand or so people typically assume. This is not the case, yet many business owners do exactly this. They fail to recognize the pitfalls of expanding, such as spreading themselves too thin.
Imagine one location being without a key person, for example. If the business doesn't have key people in place for each location, the loss of this individual can be disastrous. This doesn't even take into account the fact that each location needs a strong leader.
While a business owner might feel they can handle two jobs at once in separate locations, they often spread themselves too thin. Both businesses suffer as a result. Make certain each location has a strong leader and invest in specialist business protection to ensure the business carries on even if a major player is lost for any reason.
Before opening a business, it is best to research the reasons businesses commonly fail. Although doing so isn't a guarantee your new venture will be a success, it is always wise to learn from the mistakes of others and work to avoid repeating these mistakes. Doing so increases your chances of success.
Contact Info:
Name: Jody Pearmain
Email: Send Email
Organization: MyKeyManInsurance
Website: https://www.mykeymaninsurance.com/
Release ID: 88932754
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