Recent statistics show that about half of new companies go bust within the first 12 months of operating and 95% of businesses claim bankruptcy within the first five years. For startups, only 1% get it right.
Even with a promising idea, adequate startup capital, and a strategic product launch, there is no guarantee a business will be viable. Why is that?
Business expert Elvira Gavrilova not only answers this question but also offers an effective answer about how to avoid such fate and make your business thrive. “The most common mistake many entrepreneurs make is to think ‘I produce’ ranks higher than ‘I sell’. This is a direct road to bankruptcy. They don’t realize that sales are as critical, or even more critical today than production.”
The marketing expert, PR-strategist, co-owner and CEO EU of the international advertising company Amillidius, says, “I suggest a comprehensive approach to restore the balance between these two important components. As the practice proves, this approach is the only right one.”
Elvira Gavrilova on the meaning and principles of the systematic approach to business.
Why are sales so important?
EG: Any business rests on two pillars—production of goods or services and sales of goods or services. My definition of sales includes not only a trivial “seller-buyer” transaction but an entire system of sales. Most of the entrepreneurs misinterpret the essence of business and they contribute much more energy and money into production than into sales. These are the business people who comprise that 95 % of businesses that fail in the first five years. The main purpose of any business is profit-making which is unachievable without efficient sales.
What is a typical scenario? Ask someone, “What do you do for a living?” And he’ll respond proudly: “I run a business! I produce a soft drink.” A year later, answering the question, “Why have you closed down?” he’ll give a low-spirited answer: “Sales were poor.” And his juices could be better than his competitors but his approach to running his business was inconsistent: he managed to launch the production but failed to fine tune the chain of processes and components, leading to sales.
Elvira Gavrilova in her car, Monaco, 2020.
Let’s take a construction business as an example. Two companies raise modern buildings of high-quality materials using innovative technologies; they engage competent architects and construction workers. One freezes its sites and goes bankrupt, while the other thrives. Why you ask? A different attitude toward sales. The insolvent company makes production—in this case, construction—its cornerstone; it wasn’t as thorough with their sales. Meanwhile their competitors gave both production and sales equal responsibility. This was their compelling advantage.
The same principle works for services, too. One may locate their beauty salon downtown, employ the best stylists and technicians, and buy state-of-the-art equipment. But inadequate efforts in selling their services will ruin their business in no time. Luxurious premises and international certificates of the stylists and technicians are of little help here—they won’t bring in enough customers, while those you already have will leave for your competitors, who managed to present themselves more efficiently, having neither a favorable location nor exclusive interior design.
Of course, your company may have both a sales department and marketing department. However, their existence itself doesn’t guarantee profit if the company’s owner fails to prioritize or control the entire system of sales as efficiently as the system of production.
As a result, in terms of profitability, entrepreneurs are often outsmarted by those who don’t produce anything but can sell well. These are the people who buy your shelf warmer for cheap and sell it at double or even triple the price. And this is still the same product. However, their approach to business is very different—it is a well-tuned system of sales that any businessperson can master and practice.
It should be kept in mind that production results in either a product or a service, while sales produce actual money—your profit. It means that a successful business is a balanced distribution of the efforts among production and sales. For instance, Apple doesn’t produce a considerable portion of the components for its gadgets but purchases them from Samsung, whose production is organized perfectly well. However, Apple’s well-organized system of sales enables them to sell their goods at a 30% higher price than Samsung. The imbalanced focus on production lets Samsung down in this competitive battle. Meanwhile, Apple’s thought-through approach at every stage of both production and sales awards them with absolute leadership.
Elvira Gavrilova near the office of her company Amillidius in Lisbon.
What does a systematic approach to business development imply?
EG: Both production and sales have several components. Place, equipment, raw materials or components, and people—they are equally important when one organizes the production of high-quality goods. In small cramped non-ventilated quarters, you won’t be able to launch household chemistry production even from the best raw materials and with the best specialists. Meanwhile, a spacious workshop with cutting-edge digital control machines doesn’t ensure a high-quality product either, if operated unskillfully.
The same goes for sales. The key elements in this process are selling a brand, line of products, ways to engage customers, points of sales, and professional sales staff. Each of these components should be developed equally intensively. Your company may produce a perfect product, meeting every market demand, and the sales department staff may be very professional. Still, if your brand is unknown, or, worse, there are negative online reviews about it, your product won’t enjoy the demand and you’ll never see your profit.
Or, for instance, the brand has a good reputation, the product is of high quality, and the advertising involves new customers. But you still see no profit because of the incompetent actions of the sales staff. This can be fixed by equally developing each of the sales components. This is a central principle of Amillidius’ work. We prove in practice that a systematic approach toward building up your business is the foundation of any company’s success.
Elvira Gavrilova and the Belgium baron Alexander Zanzer at the Monaco Yacht Show 2019.
Elvira Gavrilova: Amillidius technologies of business management in action.
What is your company’s major distinguishing feature?
EG: Since Amillidius was founded, our social mission has been a determining factor for us. It implies helping as many business people as possible to achieve success. And this is the best way to reduce bankruptcy statistics and improve the economic situation in every country we work. This is the reason why every Amillidius office around the world carries out free seminars. At our branches, experienced hands-on marketing experts explain to those enrolled the fundamentals of the systematic approach to business management, which will prevent entrepreneurs from making mistakes and financial loss. During the seminars, both experienced business people and business “beginners” familiarize themselves with the latest efficient marketing tools to promote their businesses.
All the classes are carried out within Amilleader programme — our company’s proprietary system, the efficiency of which has been proven by many years of experience.
Elvira Gavrilova with Prince Michael of Yugoslavia during their interview in the lobby of the Hotel de Paris in Monaco.
In addition to focusing on marketing, what other activities do you offer?
EG: My activities are not limited to marketing, investment is another big part of it. The specific nature of my activities makes me visit different countries, meeting representatives of medium and large businesses. Thanks to my numerous business contacts, I’m among the first to find out about new promising business projects around the world calling for investors. My expertise enables me to assess the prospects and invest my money, as well as to make recommendations to my business partners and friends. Many of these projects are under my personal control. Today, the economy is extremely volatile, so I prefer low-risk investment projects and startups, regardless of the industry. In my opinion, an investment, along with developing your own business, is an excellent opportunity to diversify one’s income—which cannot be ignored in today’s environment.
How will a business benefit from cooperation with Amillidius?
EG: By implementing our mission, for many years now, we have been helping companies to avoid financial loss. We have developed an algorithm, which delivers phenomenal results in any business and in any area: from footwear and clothing stores to the aviation industry, and from cafés and restaurants to shipping services. Our method has a proven record of efficiency and always leads to the ultimate goal—development of our customers’ businesses.