6 in 10 companies close within five years. What saves the rest?
"This market is already saturated." Few phrases are repeated as often by entrepreneurs. And few are as misleading.
Crowded markets exist. But most of the time, the problem is not the number of competitors. It is the number of businesses saying the same thing to the same audience, in the same way.
What the numbers say about survival
Data from IBGE, Brazil's national statistics institute, shows the size of the challenge. Of the companies opened in Brazil in 2017, only 37.9% were still active five years later. In other words, about six in ten closed within that period.
Size also matters. According to Sebrae data, 29% of individual microentrepreneurs close within their first five years, compared to 21% of micro companies and 17% of small companies.
A lack of planning, not effort
When analyzing what leads businesses to close, Sebrae points to a combination of factors rather than a single cause. Among the most cited planning mistakes are not knowing the target audience and not researching the market or competitor behavior.
Sebrae also warns about another common mistake: copying the business models of large companies almost entirely. In other words, many businesses don't close for lack of effort, but for lack of clarity about where and how to compete.
Positioning is a management decision
Positioning is often seen as a marketing matter. In reality, it is one of the most important management decisions a business makes.
It defines who you sell to, what you promise, who you compete with and why anyone should choose you. With these answers, decisions about pricing, communication, products and even hiring become clearer.
A well-positioned business doesn't need to compete for every customer. It chooses its own and becomes the best option for them. That is how a "saturated" market turns into room to grow.
How LakeLab works
At LakeLab, we help businesses find that room. Through the LAKE MethodĀ©, we investigate the audience, the market and the competition, and analyze the business's current moment and challenges.
The result is clear positioning and an action plan that guides everyday decisions. Because for those who know exactly the place they want to occupy, no market is too crowded.
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