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The Yekola Blog

Why Black-Owned Small Businesses Are More Likely To Fail (and How Online Marketing Can Help)

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Yekola Academy

Yekola Academy

Running a small business is hard. You need to have a compelling product or service that you can effectively market to those who are looking for it. Businesses are susceptible to shifts in the market, or more significant changes in the world (like a global pandemic). And for those plucky start-ups, capital is not just essential to get up and running, but to stay running – especially in those first two years when trying to establish yourself.

The struggle black entrepreneurs face is real

Sadly, black-owned small businesses face a greater struggle in the diaspora. Recently in America, black-owned businesses were twice as likely to be turned down for loans than white-owned businesses (source: The Federal Reserve System). Meanwhile, sociologists have studied the impact of generational wealth on chances of self-employment (i.e. businesses, or large enough assets to start businesses, being handed down in families), and the disparity between different racial groups as a result.

There are many other reasons why businesses fail, regardless of who owns them. One of the most common is a failure to effectively market your product or service (over the competition), and instead simply expecting customers to stumble across you. It’s a lesson all entrepreneurs must take on board; though given the particular struggles they face, it’s perhaps all the more important for black entrepreneurs to take advantage of online marketing.

8 Reasons why small businesses fail

What is online marketing?

Online marketing is the promotion of your business, product or service using digital channels like:

  • a website, to showcase your offering and story;
  • social media, where you can interact with customers (e.g. FacebookInstagram, YouTube);
  • Pay-per-click ads (e.g. promoted spots in Google search results);
  • paid display advertising (e.g. promoted posts on
  • Facebook or banner ads on 3rd party websites or apps);
  • search engine optimisation, to ensure your website appears ahead of competitors in Google or Bing results;
  • and email marketing to send updates and exclusive offers to customers.

Whether you’re running a business or a marathon, you need a plan or a strategy. This way, you can set clear goals and figure out how you’ll achieve them, what you’ll need to accomplish this (i.e. money, time, people) and the areas you’ll need to focus on.

Why is online marketing important?

Online Marketing

 

It can help define your business
Marketing is all about talking about your product or service. To do that effectively, you need a strong sense of who you are and what you offer your audience (whoever they are). When you’re close to something for a long time, it can be difficult to get perspective on what you’re doing, both good and bad. Therefore, creating your online marketing can be the long overdue look in the mirror that you need.

You can get (very) close to your customers
Everyone is online all the time. Over eighty percent of worldwide internet traffic was on mobile phones in 2020 (source: Statista). As scary as it is to consider, we’re all being tracked. From customers’ last coffee stop to places they want to go, this is powerful consumer data that businesses can leverage to get in front of them with the right message when the time is right.

You can access real-time, actionable data
In the not-so-distant past, marketing campaigns would be set in stone weeks and months in advance. Today, you can get the data we talked about above, in real-time (e.g. YouTube analytics for a video you’ve posted, clicks on a promoted Facebook post) and make changes on-the-fly. You can quickly pivot if something isn’t working, and get the most out of your budget. You can also respond to a new trend or world event, like creating a social campaign in response to a sports game.

It can be way more cost-effective
Traditional channels, like television spots or print adverts, can be expensive depending on when and where they run. So too can paid digital channels (e.g. PPC, paid display advertising) targeting a very narrow audience; although these can be carefully optimised, as we’ve mentioned above. While building and hosting a website might involve some small costs, the right content can generate huge traffic over time if optimised well. The same goes for social media, where prospective customers can stumble across your brand through who they follow (even if they’re not looking for you).

Quick tips to create your online marketing strategy

  • Figure out your Unique Selling Proposition (USP): what makes you stand out from similar products or services? Once you have a firm grasp of this, you can shape the messaging on your website, in email subject lines etc.
  • Set SMART objectives: stay focused with goals that are specific, measurable, achievable, realistic and time-bound. For example, instead of ‘I want to have a big online following, try ‘I want to reach 10,000 followers on Instagram a year from now’.
  • Understand your audience: there’s no point being on TikTok if your audience is over 65 years old, or writing jargon-filled PPC ads if they aren’t familiar with your product. Speak to current customers to learn about the digital channels they use (including when and how), plus brands they like to follow.
  • Evaluate what you’re doing: don’t assume that everything you do will work. Monitor performance of your activity, either as you go or after a decent amount of time, and don’t be afraid to make swift changes.

 

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