#96: Why Only 4% of Practices Survive After 10 Years

PODCAST TRANSCRIPT

I moved to Australia in 2011 as a poor student without any connections, no job, money, or family and friends—just two suitcases and more than $100,000 USD of student debt from my MBA program in the US.

I started out sharing a room with another student, living in a tiny old house with 8 other students, with no heater and just one bathroom to share.

Every night, I could feel the cold, high-pitched whistling winds blowing through the rattling bedroom window, keeping me awake at night. Life didn’t look so promising back then.

But I had this dream on the first day I stepped foot in Australia of creating a leading digital marketing agency for medical practices, and that dream has kept me going until today.

Shortly after I have arrived and when I was still was working on my web design and development degree, in early 2012 I started OMD.  Today, OMD has turned 10 years old and I can’t be happier to see how many practices we have helped grow over the last 10 years.

I can remember the first time I heard that 96% of businesses fail in ten years. I was shocked and upset. How can this be? what’s happening if only 4 out of 100 businesses survive past the 10 year mark?

If your practice is a decade or more old, then congratulations, you’re one of the 4%! If your business is less than 10 years old, then I would like to share some of the most important lessons I learned over the years.

In this special video, I am discussing about “Why 96 Percent Of Practices Fail Within 10 Years”

A CBInsights analysis of 101 startups polls the reasons why those businesses failed, according to their founders.^[6] Here were the top results:

• 42% of small businesses fail because there’s no market need for their services or products.
• 29% failed because they ran out of cash.
• 23% failed because they didn’t have the right team running the business.
• 19% were outcompeted.
• 18% failed because of pricing and cost issues.
• 17% failed because of a poor product offering.
• 17% failed because they lacked a business model.
• 14% failed because of poor marketing.
• 14% failed because they ignored their customers.

Clearly, there are a many reasons why small businesses fail, but a few keep coming to the top: capital access, cash flow, lack of demand, and poor management.

1^st Reason - Money Ran Out: This widely given reason doesn’t really explain why a business failed. The money ran out because it stopped coming in, so why did the cash flow dry up? Was it due to poorly managed costs or because sales weren't high enough? Money running out also relates to an inability to obtain financing or further financing needed to sustain a business, especially in the early days, until a business can start generating profits, basically it comes down to sales pipeline and how could you keep building a predictable number of enquiries and revenue.

I talked a lot more about the similar topics in

“How To Generate More Predictable Revenues” in Podcast number #93

“And What Numbers You Must Know in Practice’s Marketing?” in Podcast number #92

Which I leave the link in the show note so you can check it out.

2^nd Reason - Lack of Research: You have to know what your customers want. Too many would-be entrepreneurs go into the market thinking they have a great service or product to offer, but they fail to realize that nobody wants that service or product.

This also applies for practices who want to expand to a new location or offer a new treatment or buy a new device that costs a fortune. By doing your homework and researching your market, especially surveying your existing patients, you will know exactly how to meet your potential patients’ needs.

3^rd Reason - Wrong Market: Too many people try to start a business targeting everyone as their demographic. This doesn’t work out well. Next, they try to target everyone in their town. Again, too broad. The more narrowly defined your niche is, the easier it will be to market to the right audience.

This is one of the most common mistakes as in marketing, if you talk to everyone, you basically talk to no one. The market is getting hyper competitive and there is an increasing number of similar service or product providers in your field, you need to know the group of target audience that you want to attract and provide solutions to the problems that this group of target audience has.

I talked about “ How to Drive Unlimited Traffic To Your Clinic” in podcast number #67 and “3 Marketing Questions You Must Answer” in podcast number #63

In this episode, I talked about the concept of the “Dream 100” which is the idea of identifying the top 100 tribes that thousands of your target audience are already active members of and finding a way to infiltrate these tribes for displaying your targeted message to these tribe members.

And then this will take our ideal patients from “I’ve never heard of this clinic?” to “What is this clinic I keep hearing about?”.

4^th Reason - Bad Marketing: It could be said that a business boils down to two aspects: marketing and bookkeeping. If you excel at both, it doesn’t matter what you are selling or offering because someone will buy it. The sad truth is that most entrepreneurs know their craft and little else. Instead of fumbling through your marketing campaign, hire out that aspect of your business. It costs money, but if done right, it will bring in much more than what you spent.

I have this story to tell you… you probably know Vincent Van Gogh who became one of the most famous and influential figures in Western art history for the last over 2000 years.

In a decade, he created about 2,100 artworks, including around 860 oil paintings, most of which date from the last two years of his life.

And yet over his short life time, he always struggled with poverty and managed to sell only one painting -The Red Vineyard. It went for 400 francs (then $20) at a Brussels exhibition in March 1890, four months before his suicide.

And then one of his most famous painting The Portrait of Doctor Gachet was later on sold for $82.5 millions in 1990, long after his death.

His sad story says something to us…it doesn’t matter how much skills, experience or how great your services or products are, if you don’t know how to market it, you are more likely to fail.

I hope his story sums up my message today, you need to constantly work on your marketing and sales and increase the sales pipeline, that’s the bloodstream of your practice.

Back to my early note, this year marks 10 years anniversary for Online Marketing For Doctors, OMD has since grown incredibly well over time, and I couldn’t be prouder of the work that my wonderful OMD team has done to support doctors, surgeons across Australia and around the world, to achieve their own dreams for their practices.

We are continuing to expand our reach internationally to North America, Asia, and Europe, and providing digital marketing services to Chinese and Spanish speaking communities, helping our clients to provide their offerings to new and growing markets.

But the tale doesn’t end here. It is constantly being rewritten every day with new exciting challenges and opportunities in this dynamically changing and ever-growing industry.

If you want to learn more about me and how our team can help you generate more new patients via digital marketing, please reach out to us and book your 15 min discovery call with me and I’ll show you the current problems and opportunities that you might have with your practice marketing.

🥳 Happy anniversary to OMD team and we wish you all the best💕

Thanks so much and hope to talk to you in our discovery call soon.