The man in the video below, T.J. Freije, can sell over 100 items an hour at top speed during a live auction.
His chant is so fast it is almost impossible for the untrained ear to understand. But online live auction software can dwarf Freije’s speed and do it nonstop, 24 hours a day.
Of course, speedy sales are beneficial to any business, but the sad truth is many small businesses close their doors far too quickly.
However, if you’re in the auction business, you may just be where the action is in terms of demand for your services. According to Barron, online-only auction sales were up 255% in 2020.
But, no business is immune to the risk of failure. Regardless of the business you’re in; you need to master the basics.
According to the U.S. Bureau of Labor Statistics, about 20% of U.S. small businesses fail the first year. 50% have failed by year 5. And after ten years, only a third are still up and running.
If you’re a small biz/auction business owner, it doesn’t help as much to know that 20% of businesses fail in their first year as it does to understand why. You might even be able to guess some of the most common reasons, but it doesn’t hurt to consider them now and then and see where you stand.
These figures vary a bit by industry. For example, construction-related businesses have a high failure rate because they depend on such factors as unpredictable housing demand.
With those factors in mind, let’s look at the top reasons businesses fail and consider how you can strengthen your business in these areas. The questions under each category can help you do some self-evaluation.
1) Are you selling the wrong products?
Many companies fail to grasp who it is they serve and what it is the customer wants. The great thing about the online auction business is that switching product lines can be reasonably quick. It’s not like you have to start a new company to shift your product line. Here are some questions to help determine if a shift is needed:
- Is your product or company getting too many negative reviews?
- Are your bid items related to an industry in decline?
- Has your market shifted?
2) Are your financial skills less than great?
Businesses run on profits. As the late great speaker, Jim Rohn used to say, “When your outgo exceeds your income, your upkeep becomes your downfall.
- Do you have a sound system for managing your monthly cash flow?
- Do you have a tax strategy?
- Too much credit card debt?
3) Are you resisting technology?
According to Freshbooks, one of the main reasons companies fail is their refusal to embrace technology. This alone could be a game-changer for your auction business. The fact is that mastering an online live auction software like Maxanet would help with all of the problems outlined here.
- How much of your time do you spend doing manual entry?
- Are you able to locate essential data such as sales reports quickly and easily?
- How many of your decisions could be improved by having better data readily available?
A popular myth
There’s an odd, often repeated notion that one should embrace failure to be successful. “Fail fast” is an overused term. The fact is we should avoid mistakes when possible. And one of the best ways to do that is to learn from Other People’s Mistakes or OPM. Have a look at some of your competitors and even unrelated businesses and how they’re doing with regard to the three areas and questions we’ve outlined.
Spend some time considering the questions as they apply to your own business and work out a strategy for addressing your problem areas.
After all, keeping the doors open for business is one thing. But what you’re really after is long-term success.