Why American Businesses Fail

I’ve been doing a lot of traveling lately for a secret project. In fact, I’ve spent the last three days in Colorado visiting Denver, Colorado Springs, Boulder, Littleton, Aurora, and Brighton.

Now I’m taking off for Miami and the surrounding areas for the next three days where I’ll be doing more of what I was doing in Colorado – stopping into a half dozen or so fitness centers, private gyms, boot camps, and training studios to meet with their owners, and figure out why their businesses are failing and losing money each and every month.

So far, and without fail, every single one of the locations I’ve visited have shared the same story…

And it’s the same story you see in all types of businesses across America, from jewelry stores to independent plumbers, and from restaurants to construction companies.

The business owner often started off small with low overhead and they did alright for themselves.

They built a good client base, they grew into their own modest location, and before long they had visions of grandeur and wanted a bigger facility with more staff, better equipment and with all that comes higher costs, bigger payroll, and without preparation or planning their profits literally fell off the cliff.

In every one of these situations the owners of these businesses spent way more time on their fancy logo, the design and look of their facilities, selecting the equipment, and nowhere near enough time on the four key elements to ensure that their business would grow, profit, and serve their lifestyle.

Now they’re stressed, over worked, and broke…

If only they’d invested some time and energy into these four simple things to guarantee their success.

1. Marketing and lead generation.

I’m not talking about making a cute tri-fold brochure, flyer, or a fancy business card and calling it “marketing”.

I’m talking about active direct response marketing that takes place outside the four walls of your business on a consistent basis, and gets folks to call, email, or walk into your facility.

2. Sales and conversion.

Not a single one of the businesses that I stopped by had a predictable, proven, or systematic sales process to convert leads and prospects into paying clients. Even worse, when I asked what their closing percentage was or what the average client lifetime value was, they were clueless.

You can’t improve what you don’t measure.

3. Client retention.

Of the six businesses I visited in Colorado only one of them had a process for tracking client results and showing it off throughout her facility. But that is an essential step for success and can’t be ignored.

The rest of the locations I stopped by failed to offer an initial client introduction to the business, didn’t gather testimonials, and worse, didn’t encourage their clients to take the next, crucial step that can literally make or break a business.

4. Referral generation.

I nearly lost it when I asked these owners what their best referral generation strategies where and they’d say they didn’t have one. None of them made the effort to make referral generation a condition of doing business.

None of them ran referral generation contents or programs to encourage their clients to refer their friends, family, and co-workers.

It crushed my heart to see these awesome business owners who I knew were passionate about helping people live better lives struggle to make ends meet.

I could tell they were stressed and in way over their heads.

What’s worse is that it seemed like they had given up trying. It’s like they had accepted the fact that there was no hope for their business to recover from the mess it was in, when in reality every single one of these business are easy to fix.

Some needed a lot more “work” done than others to get their business back on track, but every single one of them could be dealt with in a systematic and formulaic fashion. It’s not rocket science, I’m sorry.

They could all be saved, turned around, and made massively profitable. But for that to happen, these business owners needed to wake up, stop feeling sorry for themselves, and take massive action on the stuff I teach them.

As I write this email I’m reminded of the 27 Fit Body Boot Camps owners I met with last weekend in San Diego at Craig Ballantyne’s Turbulence Training Fitness Summit.

We spent a whole day together in a makeshift mastermind meeting talking about how to improve their business – and at the end of the day both John and Cara Eckerman (Chino Hills and Brea Fit Body Boot Camp owners) texted me when they realized that not a single one of the Fit Body Boot Camp owners in that meeting had a marketing, sales, retention, or referral generation challenge.

I didn’t realize that either until John and Cara brought it to my attention.

The majority of their business challenges were logistical… how to structure staff meeting better… how to structure their boot camps to accommodate more clients… how to deliver the nutritional information to their clients more efficiently… and how to create a waiting list and intake process for all of their leads that they got after running a deal of the day promo and our FBBC 1000 Pound Melt Down Challenge™

These are good problems to have.

See, all business will have problems and challenges. But I’d much rather have logistical problems that have to do with growth and expansion verses marketing, sales, and high overhead costs.

I don’t know where you are in your business. Maybe you’re just starting out, and if you are then let this be a lesson to you; marketing and selling trumps a fancy facility and sexy logo any day.

If you have your own business – in any industry – and you’re doing well but have a vision to grow your business bigger, let me ask you this…

Are you bursting at the seams with happy customers? Are you getting new clients every day? Do you have a marketing system in place? Do you have a systematized sales funnel?

If not, then why do you want to grow into a bigger location?

Are you getting the most profits that you can from your current business?

Is there room to raise your rates, to cut costs, and to improve efficiency in your product or service delivery?

Do you know how much it will cost you to move into, renovate, and run your new location?

Do you have internal, external, and online lead generation systems in place?

The fact is that anyone can get a loan and open up a fancy new business with a shiny new logo and catchy name.

But it takes a real entrepreneur to start smart, sell and market like a professional, and relentlessly control your overhead costs – that’s what builds a business that will generate strong profits and deliver you real wealth for your future.

I challenge you to look at your business – or your career – and make sure that you are a master of the fundamentals first, before going after any of the fancy, ego-driven aspects of a business like a larger location or sexy logo.

As Mark Ford taught us, be a “chicken entrepreneur”. Start small, produce profits, and systematically grow your business, and you’ll avoid failing like so many of those other businesses in your neighborhood that seem to come and go like the wind.

I assure you, success is not rocket science. If I can do it, anyone can do it! I came to this country in 1980 and couldn’t speak a lick of English. I was placed in the slow-learner classes in school. I didn’t make it through college. But I realized this…

Success simply requires following in the footsteps of other successful people that have come before you. So as a young man, I found a successful business mentor and did exactly that.

As I told those businesses that I visited last week, if you look to the masters of the past to get the direction for your future, that’s how you will achieve your American Dream.

[Ed. Note: Bedros Keuilian is the embodiment of the American Dream. Arriving in the United States from the communist Soviet Union back in 1980, his family went from being broke to eventually adding value to their new community. Today, Bedros helps over 45,000 fitness experts grow their businesses. Bedros knows the American Dream is NOT dead, because he is living it right now. So are the folks in this inspiring video – watch it now.]
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  • Ray

    Excellent advice. Most small business people I know, still believe in the old saying, “build a better mousetrap and customers will beat a path to your door.” Many of them also have limited marketing and sales skills. After the first flush of success, they’re uncertain as to why their business is stalled. They don’t understand that marketing is a process, not an event. It has to constantly adjust to competition, technology, economic changes, etc. It stands to reason that a sole entrepreneur cannot be an expert in every phase of a business. That’s why they need people like you to help them with marketing and sales. Even LeBron James needed a team to win a title.

    • Craig Ballantyne

      Well said, Ray!

  • Ania

    I hear you Bedros, that’s for sure that some gyms are missing salesmanship skills. However this is only one side of the problem. You also need to know what customers are looking for and what they hate. I am a potential customer. I checked couple of gyms in my neighborhood.
    They all want me to get married for a year and have access to my bank account 😉 Sorry, a big NO for many reasons. I got manager talking in
    the last gym and she confessed that she has a client lying in coma in hospital and paying gym membership. How ‘lovely’ of the company! One
    more case when money is more important than humans. It cannot be like that. The gym membership needs to be flexible. What I am looking for
    as a customer is something like a public transport model. If you want unlimited access than you go and get annual ticket for 365 euro (1
    euro per day of year). The ticket is not transferable and comes with a photo and personal details. Than you have monthly ticket which can
    be used by whoever has it. Paid in cash upfront, no bank details disclosed. Of course more expensive than yearly ticket. Than you have
    subscription card that has I think 15 tickets on a long strip of paper. You punch one at a time. You have 90 days to use it. It is transferable. It is more expensive again. After that comes weekly card and 3 day card perhaps not very useful in gym scenario. And than at the end you have single trip ticket valid for 1 hour only which is 100% more than annual offer. It costs 2 euro. I think it is an outdated model to force people to join for one year, to give them only one option. The fact that everybody is doing it does not make it right. If people do not stick with exercises they not only feel angry with themselves for wasting money they become an enemy of gyms as such and they WILL talk other people out of the idea of joining gym. When I mentioned to few people that I just tried new gym the reaction was to warn me against the monthly payments as if it was some kind of dangerous sect.

    P.S. One more thing: if you insist on payment through the bank you are missing out on all illegal immigrants without bank accounts 😉
    In some areas this is a considerable portion of community.

  • Ania

    If you insist that only the yearly membership would work and you want people to buy membership year after year than the whole arrangement
    of how the beginning of new customer in gym looks like needs to be transformed. The changes do not involve money investment as such. The personnel needs to be trained to know what to do. There need to be practices in place. Simple stuff, people need to feel welcome, looked after and part of community. Visit to the gym is supposed to be something they are looking forward to rather than something they are forcing themselves to do.
    I will describe to you what it looked like in my case and what I noticed if it is of any use to you. The trainer that recruited me on the street was nowhere to be found in gym. Every time I had another trainer. Big mistake. They did not care to read my long list of spinal injuries and told me do things I probably should have never tried. They were NOT interested. They were not even in the same room part of the time. At the beginning I got instructions on some 30 exercises and than left to my own devices. Of course I did not remember all the special positions of elbows, knees etc. and the next thing I did I injured my back. I went back to this gym only to cancel my membership. Another thing I noticed was how other people were treated. There was almost no human interaction. I was wearing T-shirt and leggings and I’m slim AND I felt awkward. How the 3 very fat women felt in their T-shirts and leggings I could only guess from face expressions. It’s called SHAME. It is no good and it is responsibility of staff to make people feel good about themselves if they want people to keep coming. And than there was this unlimited access BS. For newcomers there NEEDS to be routine created for them. You come, there is a beginners group for you. Certain days of the week, certain times. There should be of course choice of group. You cannot come you have to ring, NOT email trainer. There needs to be ONE trainer familiar with needs, health restrictions and progress of each member of the group. All start TOGETHER and do things TOGETHER. People need to feel they belong there and are missed when they do not come. The trainer needs to have common sense to learn names of people and ask them what they do and most importantly what their hobbies are as many people do jobs they do not like. S/he needs to INTRODUCE people. Simple stuff. There needs to be social break in the middle for whatever, drinking water for example, so that people have the chance to get to know each other. The trainer needs to organize some exercises in couples. In one word COMMUNITY needs to be created. Than people feel part of it and come because it is fun social event in their lives. After 2-3 months when there is habit created you can introduce your unlimited access. I bet that the group despite the unlimited access will keep coming on the same days at the same hour. New beginners group should start at different hour of course so that the old group’s pattern can be continued indefinitely.

    Bedros if this info is worth any money to you, you are welcome to pay me 😉 Only kidding 😀