This document discusses reasons why businesses fail to grow, with a focus on poor marketing as a key contributor. Some key points: - Only 5% of companies reach $1 million in annual sales and 0.08% reach $5 million, showing how few businesses experience significant growth. - 90% of businesses become stagnant, with 60% of those stagnant businesses citing poor marketing as a critical reason. - Studies found that businesses that continued advertising during recessions had much higher sales than those that cut advertising costs. For example, when milk advertising was cut in the early 1990s, sales plummeted and took over a year to rebound. - Many business executives lack confidence in their

1. Top 4 Reasons
Businesses
Fail to Grow
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2. The reality…
• Only 5% of
companies
will ever
reach $1
million in
annual sales
• Only .08% will
ever reach $5
million
Source: Chet Holmes author of The Ultimate Sales Machine: Census Bureau
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3. Business stagnancy in the U.S.
• Only 30% of businesses
survive and only 10%
of these businesses
Where are
grow
you?
• This means, 90% of all
businesses become
stagnant!
Source: Office of Advocacy of the U.S. Small Business Administration adapted from
the Bureau of the Census Economic Survey
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4. A common theme
• 60% of businesses that
became stagnant listed
poor marketing as a critical
contributor
• 50% of these businesses
rated themselves “low” or
“very low” in their
marketing skills
SOURCES: U.S. SMALL BUSINESS CONTRACT # SBA-95-0403, PAPER FINANCIAL DIFFICULTIES OF SMALL
BUSINESS AND REASONS FOR THEIR FAILURE (1998); D. BRADLEY III & H. MOORE, “SMALL BUSINESS
BANKRUPTCY CAUSED BY LACK OF UNDERSTANDING OF BUSINESS ENVIRONMENT AND CONSUMER NEEDS,”
SMALL BUSINESS ADVANCEMENT NATIONAL CENTER, 1997; . REDEFINING BUSINESS SUCCESS: DISTINGUISHING
BETWEEN CLOSURE AND FAILURE, SMALL BUSINESS ECONOMICS, AUGUST 2003
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5. Tough marketing decisions
• 6 out of 10 business
executives lack confidence
in their marketing
decisions
• 6 out of 10 feel their
marketing could be more
effective
SOURCE: “HP SURVEY REVEALS TOP U.S. BUSINESS MARKETING CHALLENGES,” BUSINESS WIRE, FEBRUARY 2008
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6. Advertising can prevent stagnation
A McGraw-Hill study examined
nearly 600 businesses from
1980 - 1985 and found:
•Companies that advertised
aggressively during the
recession had sales 256%
higher than those that did not
continue to advertise
Source: Advertising during Times of Economic Uncertainty.” American Business Media – Association of Business
Information Companies; 2008 Forbes Magazine, June 2008
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7. A Case Study
• To cut costs, U.S. milk ads
were pulled in the early
1990s
• Sales went unchanged for
12 months
• Then… sales began
plummeting at alarming
rates
Source: Marketing Daily Commentary, April 2, 2009, Wasting Money on Advertising by Gray Hammond
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8. The reality behind the cost-cutting decision
• Millions were lost and it
took 18 months for sales
to rebound!
• Apparently, it’s important
to constantly remind
buyers…
“Milk Does A Body Good”
Source: Marketing Daily Commentary, April 2, 2009, Wasting Money on Advertising by Gray Hammond
BROOKS, D. & SEE, E. “THE SALES THREATS THAT CAN CRIPPLE MARKETING: YOU CAN'T CONTROL GAS PRICES,
WEATHER OR COMPETITION-BUT YOU CAN REACT,” ADVERTISING AGE, JUNE 16, 2008: MARKETING INSIGHTS – REF. HARRIS STUDY 2008
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9. For the full Executive
Briefing please
visit
howbizsgrow.com
800-278-1074
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