Keys To Finding Success in Small Business
Running a small business is an attractive career path for many. However, there is no denying that it is challenging. Small business owners have to wear many different hats and overcome many obstacles to success.
The difficult truth about running a new company is that only about half of small businesses survive past five years, according to the SBA. The good news is that the longer you keep going, the higher your odds of continuing to thrive. Understanding the keys to running a small business well can help you to realize your goals more quickly and consistently so that you can build something that lasts.
Before identifying the ways to be successful, it is important to understand what the word means. Success is different for every business and every person. Naturally, profitability and the financial rewards of running a business are one way to define success. However, there are other measurements as well that are equally valid:
- Lifestyle: Many people start businesses because they want to be in control of their lives. This is both the financial independence to be able to choose their own lifestyles as well as the opportunity to be flexible with their work.
- Professional Freedom: Similarly, many people want to be their own bosses. They want to avoid being beholden to supervisors and be able to set the rules themselves. Naturally, everyone is answerable to someone, whether it be a boss or customers. However, the freedom to make your own plans is a big draw of running a business.
- Purpose: Another major reason for starting a company is the chance to feel a strong sense of purpose. If you want to build something impactful, this is likely an important element of success for you. That impact may be on customers, the community, team members or a combination.
- Financial Rewards: The financial component is an element of running a successful small business regardless of what your goals are. It is hard to live the life you want to live if you don’t have the money to do so. Financial success can be both for yourself and for your business. Additionally, there are many different orders of magnitude of financial success.
- Passion: Getting to do enjoyable and meaningful work is an aspect of success for many people. Living a positive life is difficult if your work is unpleasant. However, for some people, this takes a back seat to other types of success.
- Customer Satisfaction: Meeting the needs of customers is an important metric for the success of any business. However, some business owners consider this to be a core goal rather than a means to an end. Doing work that others are pleased with can be very meaningful.
- Giving Back: Arguably this is a type of purpose, but it is significant enough to deserve its own mention. Giving back to the community through your business can be an important goal. This can be providing useful goods and services, donating a portion of your proceeds or running a social enterprise that helps others as part of the business model.
These different types of accomplishment are all valid ways to define what it is to run a successful business. Understand what success means to you. It won’t be the same definition that other people have. Identify what success means to you. Only then will you be able to apply the keys to success effectively.
If you are running a small business, you already know how to be courageous. Starting a business takes guts, but the courage can’t stop there. You need to be prepared to take risks and innovate.
Often the competitive advantage that small businesses have over their larger counterparts is the ability to adapt and take risks. Be brave and use this advantage. There will be obstacles and many of them will be intimidating. Success takes courage to overcome those bumps in the road.
Keep in mind that courage is rooted in fear. Being brave is being afraid but doing what you need to do anyway. Don’t be hard on yourself if you get scared sometimes along your small business journey. The key is to push forward to success anyway.
Frequently, the hardest part of being brave is taking the first step. Make a habit of taking that first step no matter what. As you develop your discipline, you’ll find that you’re more capable of taking the risks you need to make your small business successful.
One of the great challenges of running an entrepreneurial venture is the number of opportunities available. This is part of why having a clear definition of success is so important. Without knowing what your long-term aspirations are, you will have a hard time developing focused, short-term goals.
This starts with finding the right niche for your business. As a small company, it is impossible to offer something that will appeal to everyone. So, you need to narrow your focus. Obviously, that niche should be one that is sufficiently lucrative to justify the existence of your business. It should also be one that you are passionate enough about that you will enjoy your work and find it rewarding.
Focus isn’t limited to just starting your business, however. It is something you need to remember throughout the life of your company. Having a clear strategy for your small business can help significantly with your focus. This doesn’t necessarily need to be a formal business plan, especially if you aren’t seeking outside capital. Nonetheless, having a consistent and thought-out plan is a big help.
When you have a defined strategy and several long-term goals, your short- and medium-term decisions become clearer. Instead of deciding from all possible options, you only need to consider the ones that will serve your strategic objectives. Naturally, that long-term plan will evolve over time, but having it as a focusing tool is worth the effort of creating the plan.
Keep Costs in Order
Cash is king in the business world. One of the greatest challenges of running a small business is achieving consistent and reliable profitability. There are upturns and downturns in demand in almost every industry. So, you need to be careful about your costs.
It can be tempting as a small business owner to want to invest in a flashy office and a big team to help you grow your business quickly. In some cases, this is the right move. However, for the majority of small companies, it is better to grow steadily and reliably than to invest too much too quickly.
When you are careful about managing your costs, you will start to build up a war chest that you can rely on during leaner times. Many business owners wait to take on new expenses until they absolutely need to. This can be a great way to manage expenses. However, if your goal is to live an enjoyable and flexible professional life, being too lean may not be servicing your definition of success.
Finding the right balance between investing in your future success and avoiding unnecessary expenses can be a real challenge. Sometimes it can help to get some outside perspective to make the right call.
Don’t Hire Too Quickly
This is an extension of managing your costs but deserves to be its own key to success because it is a major stumbling point for many small businesses. For many organizations, team members are the most expensive resource. Between salaries, benefits, office space and other related expenses, hiring people is no small matter.
Try to be as productive as you can be by yourself as you start your business. You may be surprised how much you can accomplish without additional help. In some cases, it makes sense to stay smaller so that you can do everything yourself. For example, if your goal is to maintain maximum control and flexibility, being the sole employee can be a benefit.
However, in most cases, there will come a point when you need extra help. These are a couple of alternatives to hiring permanent, full-time staff:
- A consultant to help you with your strategic, managerial and executive decision making.
- Part-time or seasonal team members to help you with your operations.
- Freelancers to help with marketing, design and other high-skill jobs.
- Fractional team members to take on key roles like process-improvement, accounting or marketing.
Finding creative ways to get work done without hiring can help you manage your costs more effectively. Sometimes expanding your team is the right move, but make sure to explore other options first.
Ensure You’re Making an Impact
There is an old saying that “time is money.” This is truer for small business owners than for almost anyone else. You want to make sure you are being productive and having an impact every day. Time management is a major part of this. It goes well beyond just staying busy, however.
Measuring your success can be a powerful tool for evaluating your own work. Track important metrics such as customer reviews, return on investment for projects, sales conversions and more. These should go beyond just how much you are earning. Even if you are turning a profit, you may be spending time on initiatives with a poor return. Keeping yourself honest with metrics can help you make smarter choices.
Always Be Marketing
Marketing is essential to business success. This is especially true for small operations. There is likely so much noise in your market that you need to put in consistent effort to break through and get your message to your prospective customers.
According to HubSpot, nearly two-thirds of businesses report generating traffic and leads as their top challenges. Drawing people to your business can be a real struggle. So, you need a well-executed marketing strategy to find the success you seek.
A major component of this is offering value with your products or services. If people like what you do, you will earn repeat business and word-of-mouth referrals. Hopefully, as a small business owner, you’ve already covered this aspect of marketing yourself.
Learn how to sell yourself and your business. Every business owner is a salesperson, even if he or she has a sales team to support him or her. It is a core skill for commercial success. So, get comfortable making your pitch to prospective partners, customers and other stakeholders.
Networking is often helpful to business owners to market their offerings. This is especially true for business-to-business operations but can also be helpful for consumer-facing businesses, too. After all, consumer products need distributors and other partners to help them succeed.
If you struggle with marketing, consider getting some assistance from an expert. Even a small amount of guidance can help put you on the right track.
Get Outside Help When You Need It
Running a successful business is no simple matter. Fortunately, others have the expertise necessary to help make your venture a success. You don’t need to rely solely on your own abilities.
Try finding a mentor who can guide you with his or her experiences and insight. Someone who can complement your skill set and challenge you to think differently is ideal. It can take a few tries to find someone who is the right fit for your needs.
Hiring an outside expert can also be very beneficial. Someone who has faced some of your current challenges before. Again, it is ideal to work with a person who will approach problems from a different perspective than you will. Otherwise, you are simply hiring someone to agree with you.