How To Make Your Small Business Thrive
Edited by Shelley, Eng, Jen M, VC and 1 other
No one gets into business with the intention of failing or remaining small for long. Indeed, all entrepreneurs nurse ambitions of making it big someday - an achievement that's only limited by one's imagination.
Fortunes in the world of business are fickle though. A thriving business' good fortune can very soon give way to a lengthy tough spell that will put the business on the precipices of failure. Circumstances change all the time such that a boon for your business may be the bane of another.
When things go awry for your small business the entrepreneur in you shouldn't simply walk away in resignation. True entrepreneurs fight back by becoming adaptable. The reason is simple - doing the same thing over and over, expecting a different result, is just a polite way to describe insanity.
A new approach is what will win the day for you. With renewed effort your small business should soon be out of the doldrums. After all, what doesn't kill you only makes you stronger, right?
Here are some strategies that you can use to steer your small business away from failure.
Restructure Your Business Operations
- 1You just can't afford to be like every other business despite offering the same type of product or service. You need to make potential customers aware of the fact that there's extra value to be enjoyed by bringing their business to you. Differentiation can be hard to figure out immediately, but if you think about those things that can work as your unique selling points, you'll soon have a good idea about what you can do. Differentiation need not be complex either - it can be as simple as your ability to strike up hearty conversations, opening early and/or closing late, offering free delivery, having a vibrant social media presence, etc.Differentiate your small business.
- 2The main motivation behind business diversification is to create additional streams of revenue using the resources currently at your disposal. For the small business owner the all-in-one concept can be put to good use. This strategy works well if one expands into a related field or sector of the current business. For example, if you run a gym business you can start selling supplements and other health products or perhaps introduce aerobics and yoga sessions.Diversify your small business.
- 3If you are not too enthused about the prospects of business differentiation and diversification then perhaps going all the way is what you need to do. Recreating your business will require you to take a long hard look at your current position, strengths and weaknesses and think about another sector of the market where you can reinvent your entrepreneurial career.Recreate your small business.
- 4Once you have identified your next possible target market you must consider the following:
- Who the customers are, what they need and how much they may be willing to pay
- If some of your existing customers can make the transition with you and if you can use them to acquire more customers
- What new products/services you'll need to offer
- If your current products/services will be relevant
- What your operational costs will be and if the expected revenues will help to generate healthy profits
- How to make inroads in the new market
- What the business requirements are
- 5You may have lost a good number of dependable customers for various reasons. Some may have left for reasons beyond your control. Having decided to become adaptable it is possible that you can now cater for some of these past customers requirements. There's only one way to find out - just swallow your pride and give them a call. Regaining their business may just save your enterprise. Perhaps they don't really like their current suppliers because the business experience isn't as pleasant as what you offered them. The customer is always right. Similarly, get in touch with former prospects and see if you can convince them to bring their business to you.Reach out to former customers and prospects.
Improve the Management of Business Finances and Inventory
- 1Your efforts at averting failure won't come to much if maintaining good cash flow isn't part of the plan. You simply have to always be aware of what the business' revenues and expenses are in order to know how much you are making. Being in charge of your finances will allow you to make calculated assumptions and forecasts because the business' seasonal fluctuations and trends are clearly observable in your records. You'll therefore almost always be well prepared even as others scurry about trying to pull through periods of slump. For this reason you must make an effort of learning how to create and use financial statements starting with the top three i.e. balance sheet, cash flow statement and profit & loss statement. Don't leave it all to your accountant or bookkeeper.Monitor cash flow very carefully.
- 2Regardless of the state of the economy, successful businesses are known for their commitment to keeping productions costs low and their prices competitive. You can't afford to be any different. Only by keeping tabs on your production budget can you manage to charge competitive rates for your products/services without compromising on quality. Your small business will as a result be in a position to sell a superior quality of product/service while avoiding price wars.Make business operations cost-effective.
- 3Using the information generated from your cash flow records you should now be able to accurately estimate how much inventory it is feasible to hold at every given time on the financial calendar. In such a state of preparedness it is easy to see that all necessary adjustments, positive or negative, will be much simpler to handle. Effective inventory control is such that the probability of having too little merchandise when sales are booming or bloated levels when sales take a slump is minimal.Manage inventory levels better.
Improve Your Workforce and Organizational Structure
- 1Assembling a great team overnight is quite impossible. The next best thing therefore is to work with what you have, making adjustments as you go forward; hiring is a continuous process. While credentials and work experience are the typical considerations for determining who will or won't make the cut, successful hiring will in time depend on your ability to understand the human element and work it to its full potential. This happens in soccer all the time where great coaches have transformed players from mediocre to legendary by simply switching their positions. Follow up hiring by ensuring that your team is well motivated and empowered. Only then can you expect amazing results.Hire a competent team.
Start Marketing Better, More Intensely and Smarter
- 1Understanding your target market is imperative for business success. For this reason you must always be aware of the changes that are affecting the market and the industry at large. Being market-savvy is hugely important in as far as staying ahead of the pack is concerned. The ability to gather and process information before the competition is greatly advantageous. Being proactive, you'll be able to know about any changes in the market that may affect your customers' tastes and preferences. This way you'll be in a position to seize and respond to opportunities faster than the competition. There's no doubt that regular online research will prove very helpful. Be a trendsetter - the early bird catches the worm.Keep an eye on marketplace trends.
- 2All the marketplace information you have won't help much if you can't sell your product/service. Now more than ever you need to become an aggressive marketer. It's a good thing that business owners have a plethora of marketing solutions and options to choose from. You obviously want to start with the most cost-effective low budget marketing options. Make the most of free and far-reaching solutions like word-of-mouth and social media.Market harder.
- 3Being on the online platform is more or less guaranteed to give your small business so much more exposure. If you are not yet online then you must really make an effort to do so. It doesn't matter if your product/service can't be sold online e.g. if you run a pub. In such a case, going online can do wonders in as far as letting people know about your pub. Going online doesn't necessarily require you to start big; you can start with social media, add a blog and finally a website, both of which must be mobile-friendly. Perhaps you already have an online store but which is not bringing in much business. You clearly need to get it revamped. Look into ways you can make the shopping experience better, make the site look more appealing, up your marketing game, explore new channels, etc.Consider venturing online.
Grow Your Network
- 1As much as entrepreneurs are admired for their resourcefulness and independent-mindedness, it's sometimes much simpler and better to ask for advice or assistance from persons who have been there and done that, some several times over. Don't bury your head in the sand; there's no shame in trying to learn what you don't know. Considering the day to day operations of a small business you may need to regularly consult with fellow entrepreneurs, lawyers, accountants, suppliers, financial advisors and more frequently your customers.Engage with seasoned peers and professionals.
- 2Any given market and industry comprises of assorted players who offer different solutions. Making strategic alignments upstream and downstream can help to expand your range of exploitable opportunities such that you'll almost always have something considerable to fall back on when your core business is in slump mode. Your strategic partners should expect the same favors from you.Pursue strategic alliances.
Optimize efficiency and go green. Everything that your business utilizes for production translates into cost. Becoming more efficient will ultimately result in more cost-effective operations. Accordingly, require everyone to become energy-efficient. This is surprisingly easy - it involves very simple actions like switching off the lights after work, using daylight, unplugging office equipment after use, etc. Efficiency should also be extended to all other aspects of the workplace including time wastage. You should institute a policy that places emphasis on meeting deadlines and maintaining timeliness.
Business failure isn't sudden, getting there is a gradual path. As an entrepreneur, the worst thing you can do is ignore the tell-tale signs warning you that your enterprise is sliding down this path. If you allow a problem to fester, it will only become worse and become the cause of many other problems. You therefore have to act before it's too late, and perhaps you'll succeed in rescuing your business.