A Step-by-Step Approach to Build a Stronger Small Business
It’s an essential part of the American dream—owning and operating your own business, calling your own shots, reporting to no one but yourself. But it’s also common knowledge that running a small business is a risky proposition—about half of all new business enterprises make it five years and little more than half of those last another five years. The reason many such companies fold?—failing to have a plan to facilitate and manage growth. As a general rule, the small businesses that do survive are the ones that take intentional and well-conceived steps to ensure that operations are continually growing, and that they have the procedures in place to effectively respond to that growth. If you have what you believe is a sound business opportunity, but you’re struggling to keep momentum moving forward, here’s a step-by-step checklist to help you grow your business:
Step #1—Identify What Makes You Different
If you can’t determine why your customers should come to you (as opposed to the competition), neither will your customers. What makes you different? Why would someone choose to purchase your goods or services? Maybe you are able to compete more effectively than others on price. Maybe your product has proprietary features that set you apart from the competition. Determine what your “value proposition” is and focus your energy there. Don’t try to compete in areas where you can’t.
Step #2—Know Who Your Customers Are and Target Them
Even Wal-Mart has a target market. Don’t try to be all things to all people. Identify who will benefit most from your product and channel your energy and resources into making certain this market knows about your product/service, as well as its features and benefits for them.
Step #3—Establish Meaningful Metrics
Every business has access to an almost infinite amount of information. Be clear about the data that affects the growth of your business. Is it the sheer number of customers? Is it repeat business? Is it the average amount of a sale? Determine what most accurately shows that your business is getting stronger and focus your time and money on enhancing those parts of your operation. For example, if you make more money from repeat customers than new customers, create processes for regular communication with and customer service to existing accounts. Keep track of any changes you make, though, and make certain you have metrics in place to help you evaluate the impact of new processes or initiatives.
Step #4—Know Where You Can Expect Most of Your Revenue
Take a close look at where your revenues are currently derived. Are there other potential customers with similar businesses or comparable needs? Are there other ways that your goods or services can be used, or other markets that could benefit from what you have to offer? When assessing a potential revenue stream, be realistic about whether or not that demographic can produce a consistent and reliable income stream. For example, if your product appeals to pre-teen boys, consider where they might get the dollars to buy the product. It might be a fun or cool idea, but one that appeals only to people who don’t have the resources to buy your product.
Step #5—Learn from Your Competition
Ask the simple question—why are your competitors doing better than you are? What are they doing well that you’re not? Do they really have a better product or are they just doing a better job of making the market aware of the product? Are they doing things that you can do as well? If you don’t know, don’t be afraid to ask—don’t simply assume that you should know or be able to figure that out. Don’t let your perception that you are smarter than the next guy get in the way of maximizing your success. Your competitors may not tell you what they are doing, but you won’t know if you don’t ask.
Step #6—Stick with Your Strengths
It’s always a laudable goal to address and eliminate your weaknesses, but it can be costly and might ultimately be unsuccessful. In many situations, you are best served to know your strengths and dedicate your energy and efforts there. If you have a strong distribution system or an outstanding supply chain, make certain they are well attended. Don’t sacrifice what you do well for what you’d like to do better.
Step #7—Invest in People
Your employees are your greatest asset. Don’t waste precious resources on a modern warehouse or fancy offices, unless you’ve already built a solid and loyal team of motivated and dedicated workers. It’s better to hire fewer employees at first, but pay them a little bit more. You’ll get the work done and you’ll build a committed team. If your employees know that you will pay them a fair wage when times are good, they’ll often be willing to stick with you when times are lean.
Step #8—Be Willing to Delegate
A common problem with small growing companies is the concentration of decision-making and strategy among a very small group of people. By doing so, you get less perspective and learn of fewer options for moving forward. Instead of trying to do everything yourself, you are better served to bring in talented people and let them do their jobs. The less time you have to spend with the nuts and bolts of your product or service, the more time you can spend strategically positioning your business for growth.
Moving Your Business Forward
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