Unveiling the Most Common Reasons Brick-and-Mortar Businesses Fail

So many small business owners worry about statistics and whether they will become one of the many who fail in the first 5 years of opening their doors.

In this blog I am going to unveil the most common reasons why brick and mortar business fail... and what you can do about it.

While the dream of running a thriving shop is exciting, the reality is harsh for so many. Let's take a look into the most common reasons why brick-and-mortar businesses fail and discover actionable insights to prevent these pitfalls.

Lack of Market Research and Understanding Customer Needs:

One of the main reasons brick-and-mortar businesses fail is a lack of thorough market research and understanding of customer needs. Without a clear understanding of your target audience, their problems, frustrations, irritations, or desires, as well as evolving market trends, you risk offering products or services that do not resonate with your customers.

To prevent this, invest time in carrying out market research. Engage with your perfect customers, the ones who you want to fill your shop and gather feedback, adapt what you offer to meet their needs. Keep looking at different market trends and be proactive in anticipating shifts in your customers behaviour.

Poor Location and Visibility:

Location is paramount for brick-and-mortar businesses, and choosing the wrong location can spell disaster. Poor foot traffic, limited visibility, or being overshadowed by competitors can significantly impact your small business's success. Before deciding on which shop is right for you, conduct thorough research to identify prime locations with high foot traffic and visibility of your perfect customer. Consider how close you will be to complimentary businesses so that you can work together as well as how close you are to competing businesses. If you decide to open near a competitor, I encourage you to take a look and see who their are targeting, what they do well and what they don't do well, so that you can plug in the gaps and make sure you are offering products and services that your perfect customer can't get otherwise. Embrace creative tactics such as eye-catching signage, engaging storefront displays, and local partnerships to draw customers through your doors.

Ineffective Marketing and Branding Strategies:

Effective marketing and branding strategies are essential for brick-and-mortar businesses to stand out. Many businesses fail due to ineffective marketing efforts or a lack of cohesive branding. To avoid this pitfall, develop a marketing plan that uses both online and offline channels so that you can be seen as much as possible. 

• Use the social media platforms that your perfect customers are on
• Send a weekly E-newsletter keeping in touch with your customers, building trust and delivering value
• Advertise throughout your store, in your windows, create flyers and link up with complimentary local small businesses to amplify your brand's presence and reach your perfect customer.
• Invest in professional branding and design to create a memorable brand identity that resonates with your customers.
• Consistency across all touch-points, from your storefront to your online presence, is key to building brand recognition and loyalty.

Inadequate Financial Management:

Financial mismanagement is a common issue for brick-and-mortar businesses, leading to cash flow problems, unsustainable debt, and ultimately, failure. Inadequate budgeting, overspending, and neglecting to plan for contingencies can cripple even the most promising small businesses.

To safeguard your business, understand every single one of your outgoings, how much they are and how often. Then understand which of these are fixed costs, like rent & utilities or which ones you have control over for items such as stock.

• Develop a realistic budget that accounts for all expenses, including overhead costs, inventory management, and employee wages.
• Implement systems to track income and expenses, monitor cash flow, and identify potential areas for improvement.
• Maintain a healthy balance between reinvesting profits into your business and building emergency funds to weather unforeseen challenges.

Subpar Customer Experience and Service:

Delivering exceptional experiences is non-negotiable for brick-and-mortar businesses. Many businesses fail due to subpar customer service, lack-luster experiences, or failure to adapt to changing customer expectations.

• To excel in this area, prioritise training and empowering your staff to deliver outstanding customer service.
• Create a culture of empathy, responsiveness, and attention to detail to ensure every customer interaction exceeds expectations.
• Embrace technology to streamline processes, enhance convenience, and personalise experiences for your customers.
• Ask for feedback regularly and listen to your customers' needs and concerns to continuously refine and improve what you offer.

While the path to success for brick-and-mortar businesses can be riddled with challenges, awareness of common pitfalls and proactive measures can allow you to have sustainable growth and longevity.

By prioritising market research before you open, strategic location selection, effective marketing, financial understanding, and exceptional customer experiences, brick-and-mortar businesses can reduce their risks and thrive.

Do you need help with your small business? Are you not making the sales you need to make or reaching the targets you are putting in place?

Well book your FREE 1-1 Call To Success by Clicking Here and we will go through your business, what has worked, what hasn't worked and then understand why. Then we will work together to create a tailor made plan to help you reach your business goals.  

Looking for more FREE help or have any questions? Follow me on instagram @thesamuelchapman and I'll be happy to talk with you!  

Speak to you soon, Samuel.