While I don’t have any data specific to the arts, the data I have is for businesses overall. As artist’s and studio owners we fit into this because we are small businesses. The SBA and USBank worked on a joint project surveying business owners of failed businesses. While there were a number of challenges and reasons noted from the 1,000’s of participants, there were some recurring answers, some common denominators. Here they are;

Business Owners fail because they
Lack vision and strategy to realize it
Lack system for marketing or sales
Lack system to monetize the client base
Try to do too many things at once (I am totally guilty of that)
No plan to invest profits for growth
Caught up in the day to day
Do everything as-hoc and no systems
Don’t create or stick to action plans

Do any of these apply to you? How many?

There are a few areas in that list that I am guilty of. Its great news that they have discovered some common denominators of business failure, now that I know what I am looking at I can go the opposite direction.

It stands to reason that if I work on improving in those areas I will improve my chances of success. So I will begin tweak my business plan and make sure that;

I have a vision and strategy to realize it (done)
Have a system for marketing and sales (done)
Have a system to monetize the client base (needs more work)
Focus on what I do best (needs work)
Re-visit my plan to invest profits for growth (done)
Not get caught up in day to day (continuous improvement)
Systematize even more, no ad hoc (done)
Stick to the action plan within my business plan that I worked so hard to put together.

As I looked very hard at my business plan and my strategic plan I compared it against the above list and another five things that every sustainable business must have;

1-A strong value proposition is the beginning. That leads to strong/premium pricing which then leads to strong margins.
2-A lead generation program that provides new leads and business opportunities on a continual basis.
3-A consistent, cost-effective way to convert leads to clients
4-A way to fully monetize customers. A system developed to extract lifetime value from a client instead of selling to only once.
5-Be efficient and effective so people perform at the highest levels.

In the next few posts I want to focus on compounding, recognizing that small changes compounded, leads to big results.

Here are some area we will look at closely. These small changes listed below.

1-increase our gross margin by 15 percent
2-a 15% growth in the amount of money each customer spends with you
3-increasing our leads or the number of business opportunities by 15%.
4- increase your conversion rate by 15%
5-increase by 15% how much you get done

If we can do these things our business will double. Next post we will address how increasing our margin by just 15% can change things drastically. Its not as hard as one might think. Come see yourself.