Small businesses make up 98% of all businesses in the U.S., employ 40% of the workforce and annually generate one-third of all U.S. sales. Launching and running a small business isn’t exactly a walk in the park. It can be challenging and stressful sometimes. But that doesn’t mean you should avoid pursuing your entrepreneurial aspirations.
Small businesses are also dynamic and resilient by nature, which is why we see many thriving small business owners operating their ventures year after year. Here are some tips to help you succeed as an entrepreneur and run a successful small business.
Know your Target Audience
Some businesses target a specific demographic, while others try to appeal to everyone. While the former can work, it’s easier to succeed if you know your target market segment. You need to know what your competitors are doing, which demographics they’re appealing to, and what specific problems they’re solving.
Create a persona of your ideal customer, and think about what they need, what they care about, and why they would choose your product or service over another. You will have an easier time creating effective marketing strategies if you know who you’re targeting because you can tailor your message accordingly.
Stay Lean and Mean
Even if you have a lot of capital to start your business, don’t go all out and spend it all at once. It’s important to keep your spending as lean as possible, particularly during the first year of your business. Average businesses have less than 18 months of cash on hand, which means you should have enough savings to sustain the operation of your business for at least a year.
Remember that expenses will exceed your initial projections, and you should expect to incur more costs than planned. Keep in mind that, on average, it takes more than a year for startups to break even. Therefore, you should be prepared to sustain your business with your savings for at least a year.
There are several ways to keep expenses low, particularly during the early stages of your business. Have a board of advisors to help you make prudent spending decisions.
Establish a Culture of Transparency and Trust
Some successful businesses have strict policies and company cultures, while others are more relaxed and casual. But no matter the culture, you need to instill trust and transparency between employees and customers. You want to set the tone from day one by clearly communicating your mission, vision, and values to employees and customers.
You should also create an environment where people feel comfortable raising concerns and offering feedback without fear of retribution. You should also be transparent about your business model, financials, and strategic goals. This will help establish trust, which is important given that many small businesses operate in an unregulated industry.
Don’t be afraid to Pivot
One of the most important things to do in the early stages of your business is to be flexible, open to feedback, and willing to pivot your strategy if necessary. You may have a specific business plan and product in mind, but you must also realize that your customers might have other needs and wants. Be open to their feedback, and don’t be afraid to change course if your product isn’t meeting their needs.
This doesn’t mean you should change your product or services on a whim, but you should be flexible enough to acknowledge the reality of the situation and pivot your strategy as needed. This will help you save time and money, two things that are in short supply for startups. You don’t want to waste precious time and money trying to make a product or service that doesn’t meet your customers’ needs.
While many aspects of running a business can’t be replaced by technology, there are some areas where technology can make your life much easier. Make sure to incorporate technology in your business, particularly if you’re in an industry that could benefit from some automation. This can include getting a business phone number that supports AI-powered customer support call bots to email marketing automation.
You may wonder how this is cost-effective, but remember that your business will likely be cash-strapped during the early stages. Technology also makes it easier to scale your operations and serve more customers, which is crucial for startups since they have a limited pool of resources.
Don’t Just Advertise, also Invite Customer Feedback
While you should use advertising to drive more sales and customers to your business, you should also invite feedback from your customers. This can be done by posting surveys and polls on your website and social media pages. This is important for two reasons. First, it allows you to gather customer feedback and see where your product or service could be improved.
Second, it helps establish a two-way communication channel that fosters trust. Most people will trust a business more if they feel they’re being heard, their concerns are being addressed, and there’s a two-way communication channel. You don’t want to be in a situation where customers feel they can’t reach out to you and provide feedback.
Running a successful small business is no easy task. It often requires long hours, budgeting, and hard work. There’s no single, specific formula for success. Instead, there are many paths to take. The most important thing is to be persistent and stay motivated. Ultimately, you’ll succeed if you work hard enough.