Why Card & Gift Businesses Close Down
Common reasons companies close & how to avoid a similar fate…
9 times out of 10, if you’ve found this article you’ve clicked on a link to find out more about a card or gift business that no longer exists.
Maybe you spotted something cool in the blog archives and wanted to know more. You may even have your wallet at the ready and be itching to buy your amazing find.
Sadly it’s not to be.
Over the last 10 years of showcasing the greetings and giftware industries, we’ve lost some pretty amazing businesses.
And honestly, it’s heart-breaking to find they’ve gone.
I find myself updating the site, looking back at all these cool products with their beautiful designs and wondering what happened.
Sometimes I can tell you exactly why a business has closed down and at other times it’s a complete mystery.
With this in mind, today, I want to look take a closer look at why card & gift businesses close/fail/disappear.
And then we’re going to tackle how to avoid this (all too common) fate; because, quite simply, I’d love more companies to survive.
[bctt tweet=”Too many small businesses fail to make it, learn the most common reasons why & how to avoid a similar fate. “]
The Most Common Reasons Why Card & Gift Businesses Close
#1 – Life Takes Over…
Life has a funny way of getting in the way of many small businesses.
Births, deaths & marriages, have played a part in the sad demise of some greetings & giftware companies.
There have also been health issues, retirements and emigrations.
Even if a card & gift business is a complete success this is no guarantee that they’ll be around forever; life often gets in the way.
#2 – New Opportunities Come Calling…
As the greetings & giftware industry is built on a tonne of talent it shouldn’t be surprising that our people are in high demand.
A fair few card & gift companies have closed when the designers and makers behind the brands are poached for a different opportunity.
Sometimes the lure of a steady paycheck or an exciting creative opportunity is a better option than the rollercoaster that is running your own business.
#3 – Business is too Slow…
Over the last decade, the saddest and most common reason for business closures has been economic.
When business is slow card & gift companies have no choice but to close their doors.
The ‘slow business’ factor could stem from sales, marketing, branding, product offering, location or a hundred different issues.
We’re facing challenging times in both manufacturing and retail across the greetings & giftware sectors so a lack of income is a major issue for every business.
How Card & Gift Businesses Can Avoid Common Closure Pitfalls
At the start of this article, I shared the 3 common reasons why card & gift businesses fail; life, new opportunities and slow business.
While these factors do have a role to play in why many companies in our industry close down, I’m sure that many have also struggled with the long list of factors that come from the governmental reports.
I believe it’s important that greetings and giftware companies are aware of these pitfalls.
By knowing what you’re up against you can prepare and give your business a better chance of survival.
So, let’s take a look at a few ideas for how we as an industry can avoid common business hurdles.
Idea #1 – Stay Educated
If you struggle with any managerial or financial concepts like motivating employees or managing cash flow it’s time to get educated.
This might mean hitting the books or DIY research online. It might mean asking an expert or seeking out a teacher.
Running a business involves taking on many different job roles: HR, bookkeeping, sales, marketing, research and design to name just a few.
It would be a miracle if you were an expert in every area of business from day 1 so don’t be afraid to ask questions and educate yourself.
Idea #2 – Create Unique Value
You’ve probably heard the term “USP” or “Unique Selling Proposition”. Perhaps you’ve even come up with a few ideas for your own USP; but have you got your unique value built into your business?
To stand out from the crowd a business needs to understand its unique value and be able to communicate what makes them special to their audience.
It needs to be communicated everywhere, from marketing materials and social media updates to the company website.
When you offer unique value you become the obvious choice for buyers. A sure-fire way to ensure your company succeeds.
Idea #3 – Get to Know Your Audience Better
To attract more leads and convert more people to buyers you need to connect with them in a deep and meaningful way.
You need to understand who they are and the problems they face so you can show why your product or service is the right solution.
I think this is particularly relevant for the card & gift industry.
More times than I can remember I’ve asked a company I’m working with who their product is for and their answer has been “anyone”.
Honestly, a little part of me sobs inside when I hear this.
Sure (in most cases) “anyone” has the ability to buy your product but how on earth do you market to anyone and everyone in the world?
I’ve been working in the card & gift world for 16+ years and I have no clue how to pitch a product to the young, the old, workers, non-workers, butcher, baker and candlestick maker all at once.
It might seem counter-intuitive, it might seem like your limiting your potential but if you know your audience and speak to your audience alone you will have a greater chance at making more sales.
Idea #4 – Commit Time to Conversions
It might not be your idea of fun and it might not be glamorous but successful businesses need to commit time to CRO.
What the hell is CRO you ask? CRO stands for conversion rate optimisation.
In your business, you might have several “conversion points”, quite simply it’s when a desired action is performed.
For a brick & mortar store these could be a passer-by stopping to look at your window display, someone entering your shop, a shopper making a purchase or signing up for your store mailing list.
Online this could be opting into a mailing list, downloading a freebie, adding a product to the shopping cart or completing the checkout and making a purchase.
The practice of conversion rate optimisation (CRO), therefore, is testing and tweaking your processes and actions until you get better conversion rates.
This could be changing your shop window so it attracts more people into the shop. Or even changing the colour of the “buy now” button on your website to see if more people add a product to the cart.
CRO offers tonnes of potential as there are so many tweaks and tests you can try out. It is however often a neglected idea. Either companies don’t commit time to testing their systems or they don’t collect the facts and figures to truly know if their changes are making a positive difference.
Committing time to conversions gives you the knowledge you need to prosper.
Idea #5 – Build a Sales Funnel
With so many companies suffering from a lack of sales there’s never been a greater need for sales funnels.
While a normal eCommerce website could have a 2% conversion rate, a sales funnel could easily convert 10x more customers.
Sales funnels come in all shapes and sizes but ultimately they’re more effective in making sales.
Instead of giving customers multiple choices as a standard eCommerce website would, a funnel directs customers to 1 specific product offering (with or without connected cross-sells or up-sells).
This more targeted approach makes the buying decision simpler and makes the practice of conversion rate optimisation simpler.
Simpler process = more sales.
Idea #6 – Keep an Eye on the Figures
Business failure statistics point out that many company owners struggle to stay profitable; Keeping expenses on track and generating income when it’s needed.
A lot of card & gift companies I’ve spoken to over the years have been known to ask how to manage their cash flow, so I think this could be a common issue for companies in our industry.
There’s no easy solution to this problem, but one hugely important factor to avoid money pitfalls is understanding and keeping watch of your figures.
Businesses need to know their expenses month by month.
A thorough financial breakdown lets you see where savings can be made, ensures you’re prepared and can help you plan your sales & marketing campaigns to improve your cash flow.
Idea #7 – Carry Out Competitor Research
Competing against market leaders is never easy, especially for small and micro-businesses.
It is, however, possible to have a successful business without being the market leader.
Many of the greetings & giftware brands I know are lifestyle businesses. Run by solopreneurs, families or close friends their aim is not to be a huge market-leading business with hundreds of employees and millions in turnover; instead, they’re seeking financial freedom, creative fulfilment and a certain lifestyle.
All of that is possible, even if you’re not the market leader.
In order to successfully stay in business, you need to offer something different to the market leader. In other words, your unique value (idea 2) needs to shine.
Researching your competitors allows you to develop your offering. By knowing what they’re doing you can plan how you will do things better or differently.
Idea #8 – Learn Leadership Skills
Leadership & strategy are often foundation elements of a business.
They dictate how a company runs, the products it offers and the actions it takes.
Despite this, in the day-to-day running of a business they can get forgotten. Other jobs take priority and no time is left to develop leadership skills or analyse your business strategies.
As both leadership and strategy are at the core of every business it’s important to make time for both.
Schedule time each month or quarter to work on improving leadership skills and reviewing your business strategies.
By setting time aside you will be better placed to spot problems before they arise and take advantage of opportunities before they’re gone.
Idea #9 – Look After Your Tribe
The right staff can make or break a business.
By taking care to build the perfect employee tribe for your business. You can ensure that your company not only runs effectively day-to-day but pushes forwards, growing and developing into something better as every year passes.
Investing in your staff, giving them shared goals, autonomy over their role and making them feel a valued part of the company can all do wonders to ensure your business attracts and keeps the staff it needs to thrive.
Idea #10 – Take Care of Yourself
Last but not least it’s important for business owners to take care of themselves.
As the reports suggest entrepreneurs can underestimate the emotional toll it takes to run a business.
Alongside the daily chores, business owners often have to contend with stress, anxiety, depression, overwhelm, imposter syndrome, lack of confidence and lack of self-esteem.
Founders tend to put every effort into their business. Working crazy hours, weekends, and holidays.
Sometimes it’s necessary, in the card & gift world we have trade shows that run across weekends. We have deadlines to meet that mean working beyond 9-5.
These things can’t be avoided, but they can be balanced. You can (and should) have time off to recuperate.
If you’re aiming for longevity, if you want your business to carry on past the 5-year mark you need to take care of yourself and set a reasonable pace.
Running a business is not like running a sprint race or even a marathon, it’s more like running a dozen + marathons one after the other.
Personally, I’m encouraging you to take care of yourself because I REALLY want you to make it.
Because it makes my day when I see a card & gift company succeeding.
[bctt tweet=”10 Tips to Ensure Your Small Business Does Not Close Down. “]
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