In a 2023 survey conducted by Sebrae, it was found that Brazil, and therefore Brazilians, are among the peoples most eager to start businesses. We rank 8th in the global entrepreneurship ranking, with 30.1% of the adult population involved in the business world. In 2024, according to another GEM study, this number rose to 33.4%, representing one-third of our population. These figures show that the growing desire and attempt to start businesses among Brazilians is remarkable. However, many end up taking actions without proper guidance, which greatly impacts the growth and financial sustainability of these companies.
Although it is interesting to reflect on the reasons why this number is so high in Brazil, we need to focus more on analyzing the mortality rate within the sector. For instance, in a 2022 study by IBGE, 60% of companies in Brazil do not survive beyond five years of operation. A very alarming statistic for anyone looking to start a business: despite Brazilians having a strong entrepreneurial spirit, many are disappointed with the results and have no choice but to announce the business’s bankruptcy. But why does this happen?
According to another study by Sebrae, based on data from RFB and field research conducted between 2018 and 2021, the three main factors causing business failures are: lack of personal preparation, poor business planning, and poor business management.
On one hand, Brazilians seek to start businesses, and this should be praised. However, creating ventures without proper planning and personal preparation mostly results in money being wasted.
Analyzing most companies from a marketing perspective, many lack differentiation, and it is essential to understand that having one or several differentiators is now crucial to even begin walking down this ‘entrepreneurial highway.’
To illustrate, imagine a potential customer looking for a shirt. Between two companies, one offers differentiation in its values, payment methods, and even in initiatives aimed at the environment. In contrast, the second company was recently created, lacks differentiators, and has stricter payment methods than its competitor. It is evident that the final consumer will definitely choose the first option.
Brands without differentiators will be treated as commodities. They are just different places selling the same ‘rice and beans,’ with no competitive edge or appeal. This was also confirmed in another study by Think Consumer Goods, shared by Google, which found that 64% of Brazilians have no preferred brands and consider factors like price and personal values when choosing products.
In Generation Z (GenZ), made up of those born from 1995 onward, brand disloyalty reaches 65%, according to the same research. It can be inferred from this study that Brazilians, especially from this generation, will seek brands that align with their values, potentially choosing small businesses with appealing differentiators over large chains.
This scenario shows that if you lack differentiators, potential customers will turn to competitors who do. Today’s market has become complex, and brands that think of selling products as commodities will not thrive.
While some sell a shoe, others sell a Nike running shoe, at a retail chain committed to sustainability, social responsibility, customer experience, human values, purposeful digital engagement, etc. Everything will depend on how you position yourself and differentiate from others doing the same as your business.
