Why Do 96% of Businesses Fail Before They Hit Their 10th Anniversary?

From what I have seen over the years, most businesses fail because they don’t have enough cash to pay their bills, and eventually have no choice but to tap out. I can’t speak about the failure of my business because somehow it has become part of the 4% that made it to its tenth year, which my wife and business partner Angela Kafadar and I just celebrated this past Saturday.

Although our business’s level of success has ebbed and flowed over the past ten years, we’ve managed to survive, and I thought it would be interesting to look at the past 10 years and see if there was one factor that got us to where we are today, and then share that with all of you.

When I incorporated Blue Lizard Productions in 2007, there were a handful of competitors around, and then the market continued to become more and more saturated as the cost of acquiring the equipment to produce professional video became cheaper, and more and more students poured out of college eager to start their own video production companies. I’ve seen so many video production companies come and go, many not even making it through their first year.

Early Adopters Versus The Laggards

When I started my business, video cameras still recorded to tape and in standard definition. The tapes were eventually replaced with solid state media, and we’re now shooting video in 4K. It happened at breakneck speed, compared to the previous 10 years. However, whenever a new video camera technology came into play, I didn’t jump on it right away. I always waited it out a bit, then once it took hold… I jumped in.

Those around me that continued to invest in the latest and greatest cameras were having to replace them the following year, even though their current ones weren’t even paid for yet, wreaking havoc on their cash flow and causing them to throw in the towel.

Then there was the others, who refused to upgrade their gear, they suffered as well as their clients went elsewhere to get the unique look of a DSLR with its shallow depth of field and the crispness that only high definition could bring to their marketing videos.

I Got Bit in the Ass by a Penguin (Thanks Google!)

Early in my business I recognized the power of the Google search engine and exploited every angle with SEO tactics, some not so legitimate, but they worked and I was ranked number one for my search terms across my region, even ontario at one point. My competitors at the time were caught with their pants down and had no idea how I was doing it. (I read a book.)

That reign only lasted 5 years as Google changed its algorithm in 2012… to Penguin, and I fell to the fifth or sixth spot in the results, but not before I had secured my brand in my market and had enough clients to keep my business afloat and generate new referrals. I’ve since recovered by making my SEO tactics more Google friendly, but I’ve not had the same kind of success online since those first 5 years. However, we’re currently experiencing some surprising comparable growth as we begin to wrapped our heads around native Facebook videos and Facebook Ads, which so far has been generating some very impressive results.  (Still testing and measuring the results, but it’s exciting!)

Listen To Your Clients and Give Them What They Want

Through all the different types of videos we’ve produced over the years for our clients, we were always listening to what they wanted, and when we noticed a trend in what our clients wanted from a video production, we packaged that up and served it to them and also made it available to others. The types of videos we were producing even two years ago are quite different from what we’re producing today.

For example, we had small businesses and even solopreneurs asking us to produce professional videos that they could post on social media sites like Facebook, but with the cost for a typical video production starting at around $1500, it put professional videos out of their reach.  In late 2016, we launched www.WhyVideo.ca to service these clients with professional videos that cost less than $200.

We also recognized the recent popularity of self-produced smartphone video marketing and developed on online training course called the Video Star System, which shows people how they can produce their own professional looking online marketing videos for little to no money using only their smartphones.

The Bottom Line: “Your small businesses must evolve… or die.”

So, there you have it, the key to our 10 years of success was change, and managing it.

  1. We need to continue to keep on top of technology as it changes, but don’t be on the bleeding edge.
  2. Different online marketing strategies continue to develop, and we need to develop with them.
  3. Always listen to our clients, and give them what they want, not what we think they need.

What about you?

If your business has made it past even one year, if there was one thing that has kept your business alive, what would you say that is? A mentor? Low overhead? Customer service?