Recent decades have witnessed the rapid emergence of start-ups, which pop up almost every single day. Whereas most young entrepreneurs still hold the belief that running a new business is the quickest road to success, the fact is that only two out of ten start-ups survive the first 18 months of business. The infancy period of a startup is especially volatile for those entrepreneurs that don’t have any previous hands-on experience in running a business. There’s a range of reasons why a startup can fail this early, from unsatisfactory products and services to poor recruitment habits.
Having a plan for growth is more than vital to the success of any small business, which explains why we have come up with a list of things you need to be aware of if you’re to take your business to the next level.
Small Business Needs
1. Cash Management
There are a couple of old sayings in business: One is “cash is king, another is, “Happiness is positive cash flow.” Surveys are constantly conducted on failed businesses, which reveals the findings that all or most of the failure of up to 60% of failed businesses was due to cash flow problems.
This isn’t even about profit, it’s about not having cash at hand to successfully push forward. Even the most basic home business incurs a multitude of startup costs, including registering a business name, obtaining a business telephone line and printing business cards. Unfortunately, start-up businesses often find themselves short of cash right off the mark. Existing businesses can find ways to survive if they can find ways to generate cash. Cash is the single most important element of survival for a small business. Small businesses often say that an inability to control cash is their single biggest problem.
If you don’t have good cash planning, chances are you’ll go bankrupt really early and you won’t even know what hit you. How long does it take for you to collect payments from clients? Will you do it before you need to buy inventory? Are there any loans you need to pay back in the meantime? The more time you invest in cash flow planning, the better chances you’ll have at succeeding in your industry.
2. Talent Recruitment
You should be well aware by now that a business is only as good as its employees. While you may be able to micromanage everything in the very beginning, pretty quickly that will become an impossible task and you’ll become dependent on your employees to do most of the work. Thus, it goes without saying that talent recruitment is always of the utmost importance.
The hiring of experienced professionals with track records of excellence within their area of expertise ensures that the mission and goals of your business will be carried out efficiently and with competence. Strong team members can be recruited using a variety of methods. Staffing agencies and executive search firms, which specialize in placing talent of all levels within every industry, appears to be a viable option. An alternative is to leverage your networks to find employees through referrals from individuals whose judgment is trusted.
One noteworthy point is that talent recruitment isn’t all about getting the best people together and trying to make them work, but actually recruiting people that will naturally fit with the team. Someone may possess all the skills that you expect in an employee but isn’t as comfortable with the teamwork nor embrace the corporate culture of your firm. In the initial stages, it is advisable to put huge efforts into recruiting those who are likely to become leaders (not bosses) and help you build a great team.
3. Industry Know-how
Perhaps the greatest thing an entrepreneur can do when establishing a new business is to gain as much education as possible. By understanding clearly your business’s competition and gaining an in-depth knowledge of your specific industry, you will be better prepared to make smarter decisions regarding the direction of your firm.
To take a specific example, most new small businesses just don’t have the know-how to deal with marketing in the initial stages. As it turns out, marketing is actually one of the most significant things you can focus on when developing a business to make your business stand out amongst other competitors in your industry. Should you opt for SEO (Search Engine Optimization) or PPC (Pay Per Click) campaigns? To actually know what works best for you, you’ll need to test things out, dig into your industry’s nature, make detailed observations of your competitors’ SEM (Search Engine Marketing), and more importantly, perform some in-depth researches about the consuming behavior of your target customers. Exploring unique insights of target customers and knowing exactly how you are going to attract them will allow you to orient your marketing efforts in the right direction.
Together with industry know-how, it’s more than essential to keep pace with technological advancements in order to best prepare for what’s coming on your way.
4. Control of Profit Margins on All Products and Services
Profit margin is one of the commonly used profitability ratios to gauge the degree to which a company or a business activity makes money. It represents what percentage of sales has turned into profits. Simply put, the percentage figure indicates how many cents of profit the business has generated for each dollar of sale.
In fact, a majority of small businesses out there are focused on launching too many products and services in order to boost their visibility in the market. This creates a situation where they don’t control the margins as well as may be needed, thus dragging their total profits down. Your total revenue should always come second, behind your profit, and if there are any products or services that you can get rid of to increase the overall profit of your business, you should do it as soon as possible. Even if you’re looking to sell your business at some point, buyers won’t be interested in the revenue you’re making, but only in profits. By controlling the margins on all your products or services, you’ll have a better insight into what needs to be done at every stage of business growth.
5. Communication with Customers
Communication is at the heart of human interaction, and it can make or break a business. Being able to communicate effectively with customers can lead to increased sales, repeat business and referrals. On the other hand, not being able to can quickly lead to decreased sales, frustrated customers and negative word of mouth.
From social platforms to reviews and testimonials, you need to be aware of what your customers are saying about you at all times. If you do a good job of knowing what your customers like and expect from your business, you’ll have a much easier job retaining them as loyal customers. More importantly, fostering strong communication makes it possible for you to promote your brand to future customers, develop a strong relationship with existing customers, and address customer concerns.
Ask your customers to express their opinions and don’t turn your back to negative criticism—it can really help you understand what changes your business needs to go through to better satisfy your customers’ needs. Allow your customers to write product reviews and testimonials and you may also increase the conversion rates, as most visitors these days don’t buy anything without reading a review first.
Small Business Resources
Running a small business can be a lonely life – a daunting journey with such huge concerns to care about. Working long hours to keep the doors open, it can be easy to feel as though you’re the only struggling entrepreneur. But actually, you’re not – and help is available.
The irony is that many small-business owners don’t ask for assistance even when there are valuable and affordable resources out there providing expert advice and support. Here are 7 often-overlooked sources of help for small entrepreneurs:
1. SBA Community Groups
Whereas you might recognize the Small Business Administration (SBA) as the institution that partially guarantees affordable loans for small businesses, the SBA has various initiatives to help entrepreneurs succeed.
Arguably one of the best resources out there, the SBA includes regional and district offices you can go to if you want to meet other business owners, take classes and boot camps, learn more about business financing, secure special contracting opportunities, and much more.
SBA’s “Create Your Business Plan” section of its website is an excellent place to start when drafting your business plan. If you’re not sure how to write a business plan, this free resource will walk you through each section, telling you what to include and how to make it stand out. Don’t miss out on everything the SBA offers! Connect with your local peers and learn the best practices for managing your small business.
2. Service Corps of Retired Executives (SCORE)
Connected to the SBA is SCORE, a humongous network of business mentors that spans across the country. And the most attractive advantage of SCORE is that it’s absolutely, completely, 100% free! The retired executives who serve as SCORE volunteers are an unheralded national treasure, yet few businesses tap into their knowledge. These volunteer mentors will help you create a business plan and find customers, increase your profit and customer satisfaction, and juggle your work life with your personal life. No matter what kind of entrepreneur you are or what sort of business you run, SCORE can help.
Besides, SCORE’s Business Plan page is definitely a fantastic site for your entrepreneurial spirit as it is loaded with several online business workshops and podcasts, which are easily accessible on your demand.
3. Local Chamber of Commerce
A small disadvantage of this resource is that there’s often a membership fee, in some places it can cost up to $500. Even if this may be pricey, joining your local Chamber of Commerce could pay off in a big way.
You’ll get the opportunity to meet other business owners—which is especially useful if you’re running a B2B company, since they could become your customers down the road—and you can get your business featured in local conventions and trade shows, too. Plus, you’ll have access to professional development workshops, exclusive newsletters, and even FedEx shipping discounts. As far as business resources go, your local Chamber of Commerce is a big one.
It might sound a little too simple, but even joining local meetups on websites like Meetup.com can actually help your business out.
By getting to know other business owners in your area, you’ll have a group of fellow business colleagues who truly understand what your obstacles are like —and what your victories mean. You can celebrate or commiserate together, brainstorm ideas for each other’ companies, ask for and offer advice, or even come up with unexpected partnerships.
And, at least, you get the chance to make a few friends who empathize the daily joys and struggles of being a small business owner.
5. Industry & Trade Associations
Do some research or take a look at some lists of trade associations to find some you might belong to. Joining an industry or trade association will give you access to business resources like special directories, conferences, events, and classes, as well as business purchase discounts, insurance, and more, depending on your association.
Trade groups are also a great source of useful research and forecasting on industry trends, so members can give you a jump on the competition. Better than joining, get involved in shaping the agenda, and organizing events! You’ll learn a lot and build great relationships with others in your field, too. Prices vary, but most trade groups deliver a lot of value for the dues you pay.
Additionally, there are specific associations designated for women, minorities, and veteran entrepreneurs with similar business resources available— so make sure to look into all your small business opportunities for learning and growth!
6. Your local colleges
Local colleges can be a wonderful source of entry-level job applicants, a conduit to finding qualified interns, or a place to send workers to get training on the cheap. If your local college doesn’t offer the vocational education that your business expects in an ideal future employee, just let the college know. A large number of learning institutions are focused on meeting the needs of their local business community, so they want to hear from you. They might design a new course to suit your requirements or invite you to be a guest speaker at a business course, helping to build your reputation and attract new hires.
7. Community Forums
It may seem old-fashioned but sometimes talking to other business owners on business forums can go a long way. Not only can you make connections to business owners in your specific area or industry, but you’ll also have a chance to candidly ask questions, listen to advice, learn from mistakes, and even teach others in a judgment-free zone.
Take a peek at these forums where small business owners help each other out—so everyone can succeed.
It might not be directed solely to business owners, but Quora has a strong entrepreneurial presence and plenty of industry leaders online who can answer your tough questions. It’s important to keep in mind that some people use Quora to promote themselves, so the answers you get might not always be 100% accurate—or bias-free, at least.
From marketing and management to taxes, accounting, payroll, and much more, SmallBusinessForum.net is truly by the people, for the people. There aren’t many better places to seek out honest business experience and advice from people eager to help.
The above-mentioned two forums aren’t too different—so why not post your problems on both and see the different answers they come up with?
On SmallBusinessForums.org, by the way, you can also find professionals to help you with marketing, financial planning, and so on. These are great business resources that no entrepreneur should leave unexamined.
That’s right—your accounting software has a community forum dedicated to small businesses. Whether you’ve got questions on taxes, vendor payments, accounting reports, or even just starting a company, give these boards a visit.
If you run—or would like to run—an Internet-based business, then the Warrior Forum should be your first stop. Full of blogs, social media, a product marketplace, and the hottest tips on Internet marketing around, this forum is a gem for online business owners.
Bank of America Business Forum
Although this forum has plenty of different entrepreneurial topics, its main focus is, surprisingly, business financing.
Got a question about your business credit cards? Looking for a line of credit? Want to know whether you should self-finance or look for equity or a loan? Best resources like these can help answer your dilemmas, and this forum would be the right place to go.
It’s not a traditional forum, but LinkedIn has an extensive network of business-oriented groups where you can read helpful advice, raise concerns, and find out solutions. Plus, being active on LinkedIn groups will garner you respect and attention—that your small business could benefit from.
Alignable is a forum with a deep foundation in relationships. Finding and meeting local business owners, coordinating customer referrals, and getting the best advice around those are what Alignable allows you to be able to do with ease.
Sometimes general business advice just doesn’t satisfy your specific pain point. You need to get industry-specific one!
That’s where FohBoh comes in—if you manage a restaurant, at least. Discuss restaurant-related problems like tipping and loyalty programs with other like-minded professionals to get the best insights on issues that are actually affecting your small business.
CNET Small Business Forum
If you’ve got technical questions—ranging from, for instance, what mobile devices are better for entrepreneurs to which manufacturers make the best hardware—then CNET, a technical site, is the place to go. You get to profit from the experience and expertise of business owners who also happen to be very technically inclined!
The bottom line:
Success in the world of entrepreneurship is never an easy achievement – it is a highly rewarding yet extremely challenging journey. Fortunately, you are not alone in this journey! There are always several available business resources where you can learn, connect, stay informed and move forward.
Starting a small business in your niche is already overwhelmed with several preparation activities but keeping your business image visible online is also crucial to the success of your chosen business idea. Should you need any help with a dedicated team to get your business exposed to the digital world, don’t hesitate to get an online presence manager.
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