Why You Need to be Growing Everyday

July 16, 2019

80% of businesses close within their first two years, and 50% close within their first five, and what's the number one reason why businesses close? Because they just don't have enough customers coming through the door to pay the bills to keep the doors open, to keep the lights on. But let's understand this from a statistical perspective. U.S. data right now suggests that if you wanna grow your business by 10%, you need to be attracting 28% new customers every single year, why? Because the attrition rate, the rate at which you lose customers or clients every year is about 18%.

You'll lose customers for one of three reasons. Number one, distance. Your customers, your clients will move away, they'll go somewhere else. Number two, you'll lose customers because they get a better deal somewhere else. They find what you do cheaper, not necessarily better, but they'll find someone else who's cheaper and so they'll go and compete on price. Or number three, you'll lose customers because they'll die. You know, they die, they don't come back. So those three reasons alone, distance, deals, and death means that if you wanna grow your business by 10% every single year, you need to be growing by 28% to account for your natural drop-off, your natural attrition rate of your customers or clients.

What does that mean? Every business is always in a growth phase. You've gotta be investing time, money, and attention into your marketing so you can consistently attract new leads into your business and convert them into new customers. If you're not doing that, you're gonna be one of those 80% of businesses that close within two years. And if you take your eye off the ball, you'll be in those 50% of businesses that close in five.

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