No matter what type of small business you have, or what type of product or service you sell, starting a business can be tough. Many entrepreneurs dip into their personal financial resources and bootstrap their business start-up. Not only are personal financial resources invested in their small business, but lots of hard work and sweat equity are involved as well. According to the U.S. Small Business Administration, over 50% of small businesses fail in the first 5 years. Those are sobering statistics for those who own a small business! That being said, most entrepreneurs receive boundless satisfaction from working for themselves – it is the American dream! So, let’s talk about 5 tips that will give you a leg up, and help increase the opportunity for success in your small business.
Have a plan. There is an old adage that says “People don’t plan to fail, they fail to plan”. We cannot stress enough how important it is for you to have a business and strategic plan. When you start a small business and are funding it on your own, it can be tempting to just dive in and get started. However, your business plan is the roadmap for your business. If you don’t know where you’re going and what your objectives are, it becomes much more difficult to succeed.
Focus, focus, focus. This means multiple things. One, your small business should fulfill a specific need. Find a niche, and focus on it. You can’t be everything to everyone! Two, spreading yourself too thin is a major mistake that many small business owners make. Recognize that you are probably not an expert in every area of running your business. Focus on what you are good at, and get help from others who are experts in other areas. Three, focus on smart business fundamentals. Sales generating activities, great customer service, and business financials are three sound areas to keep your focus on.
Be willing to change. I know we just told you to find a niche and focus it, however, that does not mean that your business should not be adaptable. Carefully monitoring your business metrics, as well as the feedback from customers and potential clients will give you valuable information about what you need to do to adapt your business to your customer’s needs. Listen to feedback and make changes accordingly!
Build a credit rating with local banks. This is something that not a lot of small business owners do, but can be very helpful if you run into a cash crunch at some point. This business practice involves borrowing a sum of up to $1,000, every 90 days or so, particularly when your business doesn’t need the money. Place it in an interest bearing account, and pay it back about a month or so before it’s due. This increases your borrowing power, and gives you credibility to obtain financing when your business really needs it.
Make sure someone else is trained to run your business. In the unfortunate event that something should happen to you and you are unable to run the business, it is critical that someone else be familiar with the people associated with your business, such as your attorney, accountant, suppliers, creditors, and customers, as well as the business practices of your business. If you are married, your spouse would be an excellent choice, or someone you are personally close to and trust.
Your small business can succeed! Incorporate these tips into running your small business and you will have a great start. Do you have tips that have helped your small business succeed? We would love it if you would share them with us!