According to the latest figures, there are around 32.5 million small businesses in the US today. But, alongside this very impressive statistic, there’s a far more worrying set of numbers too.
The fact is that almost 22% of all small businesses fail in the first year and by year five that figure rises to 50%. Behind the numbers there’s the inevitable human cost of jobs lost, and dreams shattered.
So, it’s vital that any small business takes as many measures as it can to avoid just being another statistic. By following these seven principles it’s not guaranteed to ensure business success, but it will give you a very good chance.
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Have a fixed business plan.
There’s an old adage “fail to plan and you can plan to fail” that holds true for small businesses. This is why it’s vital to have a sound and realistic business plan which will include projected turnover, likely costs and the need for investment. Not only does it give a business some benchmarks against which it can check its progress, it can also be vital if you plan on going to the bank for a business loan.
Know your competitors.
Often, a business fails because there are other competing companies that are cheaper, better or simply more inventive. In the majority of sectors, it is only businesses that have carved out a particular niche for themselves and which have a particular brand or profile that enjoy success. So, by marking out your own unique territory you can stay one step ahead of the competition.
Reduce cashflow risks.
There are many perils out there for small businesses, and they are primarily financial ones. Cash flow is always going to be important but often customers are slow to pay, and suppliers are quick to demand their invoices are settled. So, for many small businesses using invoice factoring can be a real lifeline. In this finance company buys invoices from you for the full amount, minus their fee, and then seeks payment directly from the receiver of the invoice.
Be extra efficient in your admin.
Every minute a small business owner spends on internal admin is a minute that could otherwise be spent serving or acquiring new customers. So, anything that can be done to streamline operations is a good idea. This can even apply when paying out money, especially if a preferred method happens to be voucher checks. As the name suggests, these are checks with two vouchers, or stubs, attached to them. Most usually used for payroll, they automatically include deductions which are then automatically printed on the stubs, saving time, and eliminating data entry mistakes.
Choose your staff carefully.
Hopefully, the staff who are being paid by voucher check will have been hand-picked. In a small business everyone really does have to pull their weight – there’s no room for passengers. So, it’s important that they share the overall vision of the business owner, and it’s the owner’s responsibility to make staff feel like they have a stake in the business’s success.
Remember, the customer is king, or queen.
Without its customers, a business is nothing. It’s also far harder to attract new ones than it is to retain existing ones. So, everything a small business does must focus on them. This means keeping as much data as you can about their preferences and even asking for honest feedback about how they feel about the business. Plus making special offers to both new and existing customers will always be a good idea.
Be adaptable.
One of the big advantages that a small business has over larger rivals is that it can react more quickly to change. Being flexible to suit new or different circumstances will pay dividends both in the short and the long run.
So, there you have them. Seven tips to make a small business successful. Add in a good portion of luck and you should be well on your way.
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