In September of 2013, Eric T. Wagner published an article in Forbes-magazine[1] detailing five reasons why eight out of ten businesses fail.

1. Businesses are not really in touch with customers through deep dialogue
2. There is no real differentiation in the market (lack of unique value propositions)
3. The failure to communicate value propositions in clear, concise, and compelling fashion
4. Leadership breakdown at the top of the organization (founder dysfunction)
5. The inability to nail a profitable business model with proven revenue streams

Every one of these points has a common denominator: they are all related to sales, sales skill, and sales success. Here are my five reasons why businesses fail:

1. Running out of money before the business takes off. Many times a business that fails simply ran out of money, period!
2. Not reaching the potential customer base. This really has nothing to do with being in touch with customers because in order to be in touch with customers, one needs to have customers. I am talking about potential customer not knowing you exist. A solid tip on how to recognize a customer: it is the one who places an order with you.
3. Not pricing goods or services properly, causing an inability to close potential sales. There are potential customers for every company, but offerings must be aligned with the price that those potential customers are willing and capable of paying.
4. Hiring the wrong type salespeople. This is by far your biggest challenge as a business owner or department manager. Your sales people are an extension of you and your company, and they must act like it. A “wrong” salesperson can create an enormous amount of bad will and a poor reputation.
5. Not training your salespeople properly. Big corporations can afford to hire people with no experience or with limited experience, small business can’t.

A good salesperson is much more valuable than they often get credit for. If you are in a sales management role, I would urge you to take a look at your sales force today and see how you can help them achieve greater results.

[1] http://www.forbes.com/sites/ericwagner/2013/05/23/5-key-business-model-components/