Online marketplace eBay is braced for a 30 per cent surge in new business registrations this month. January is the most popular time for businesses to start-up online, according to new figures released.

The top ten most successful new businesses are now turning over nearly a combined £6 million through their eBay stores. This is an average of £600,000 per online business in its first year.

But what’s really astounding about these figures is that 60% of these businesses will have failed within five years of trading (FSB). Information and communication-based businesses and retailers have the highest new business survival rates after one year. But for longer-term survival, businesses in the health and education sectors fare the best, according to a study by Ormsby Street.

So how do you ensure that your part of the 40% of businesses?

Many factors account for failure but the top five are;

  1. Cash flow – it doesn’t matter how profitable you are if you don’t have cash you’re out of business
  2. Failing to listen to your customers – relationships are key. What they have to say about you will reach far more potential consumers than any professional article written in a magazine. In fact, studies have shown 78 per cent of consumers will listen to other consumers online more than any other source. Social media and online review sites have made it even easier for people to have their say, therefore, offering quick and helpful responses to feedback will help build a relationship, whilst also impressing your current and potential new customers.
  3. Failing to adapt and grow with market changes. If you are not studying your market and evolving accordingly, you run the risk of becoming left behind. Rather than waiting for the change to happen and adapting only when push comes to shove, try to be one step ahead of the game and plan ahead for future trends. This may seem almost impossible to start with, but after you have been regularly researching your market area, you will begin to see recurring stock trends, manufacturing methods or marketing techniques. Taking the time to get into the habit of regular market research will set you ahead of the trends and help you stand out in your local community. Always give your customers what they want, but try to anticipate what they’ll need in the future.
  4. Failing to use online marketing. What’s the name of that store on the high street? I’ll ‘Google’ it. In a world where Google has become the go-to place where all questions are answered. Not having an online presence will leave your customers thinking your business is stuck in the past. Failing to use online marketing means you will be missing out on a vast section of potential customers. According to an Invesp study, 80 per cent of consumers now use the Internet for shopping. Further to this, 81 per cent of Internet users research products online before parting with their hard-earned cash. Failing to provide your customers with this basic luxury will doom your business to failure.
  5. Failing to measure your marketing. There is no excuse to not measure the success of your marketing. Tools provided by social media record how many people your posts reach organically so you can see how well a specific post has done. These can then be boosted or promoted at a cost to reach specific customers. Based on age, gender or geographic location. But it’s not just online – you need to consider press, radio, flyers etc. Have the person who is customer facing in your business ask where the client found you. Record this and you’ll save thousands in marketing pointlessly in the future.

Whilst not an extensive list of the potential downfalls. It certainly is a success criteria my clients apply to ensure a consistent growth of 30%+