More than half of small businesses fail within five years of launching. That’s not all the worrying reality that the stats show though as data published by the Bureau of Labour Statistics shows that only 30 percent of new businesses manage to continue operating after a decade. Overall, this demonstrates a failure rate of 70 percent.
To put it bluntly, the odds are stacked against small business owners. The simple truth is that most founders will be forced to shut their doors within the first ten years of launching their new company.
Failure, however, is not a given. If you’re thinking about setting up a new enterprise, having a concrete, proven plan can dramatically increase your chances of long-term success. In this post, you will learn seven practical tips for running a well-oiled, profitable business machine.
1. Create and Test Processes for Menial and Legal Tasks
Recurrent administrative tasks can quickly build up if they’re not taken care of. Ongoing jobs include bookkeeping, accounting, payroll, submission of tax documentation and so on. Failure to complete these perhaps mundane tasks in a timely manner can lead to fines and wasted resources when they can’t be postponed any longer.
Setting up specific, detailed processes for ongoing tasks will enable you as a business owner to delegate effectively and direct your attention towards other more important priorities, safe in the knowledge that administrative responsibilities have been or are indeed in the process of being taken care of. Often, it will be financially viable to outsource this kind of work.
2. Set Clear Goals and Key Performance Indicators (KPIs)
It is crucial to define your “success metrics” from the outset. You should consider two questions: “how will we gauge our performance in key areas?” and, “what does success look like in concrete, measurable terms?”
A key performance indicator (KPI) is a performance measurement that is considered particularly relevant to your company and industry. Examples of common KPIs include number of new customers, churn rate and sales revenue.
Your goals should represent achievable outcomes in terms of your KPIs. In this way, you will be able to ascertain whether your broader strategy and processes are effective or not.
3. Develop a Measurable Sales and Marketing Plan
Your marketing and sales plan is the engine of your business. The vast majority of new companies fail due to simply not being able to maintain sustainable levels of sales and customer acquisitions. Assuming that other areas of your business are working efficiently, a well-developed and flexible marketing plan will ensure sufficient revenues and profitability well into the future.
Various factors make up an effective marketing strategy and therefore, implementing a tracking framework through which you can measure reach, engagement, conversions and lifetime value is essential. It is also important to run A/B and multivariate tests, continually experiment with new customer acquisition channels and maintain loyalty and engagement with your existing customer base.
4. Implement Customer Service Infrastructure
Customer service is critical from a business standpoint for a variety of reasons. Most importantly, customer retention is far more cost-effective than generating new customers, and strong customer service helps ensure that your existing customer base remains satisfied. Furthermore, consumers are willing to pay extra for a service that comes with a high level of additional assistance.
Offering fast, expert customer service is actually not as difficult as it might seem. Numerous software solutions that allow small businesses to provide chat, email and phone support are available. If you don’t have the resources to run your own in-house team, many inexpensive outsourcing options are available, so no need to press the panic button!
5. Leverage Multiple Recruitment Channels to Find the Right Staff
Your small business might have all the ingredients needed for success: an excellent product or service, an innovative marketing plan and a robust administrative framework. Without talented, qualified people to manage and implement these things, however, they ultimately amount to nothing.
Simply put: do not underestimate the importance of your team. It is imperative that you find the best-suited individuals for open positions within your company. This demands that you make use of all available recruitment channels, including social media platforms such as LinkedIn, job search engines, recruitment agencies, traditional press advertisements, amongst many others.
6. Build an Automation and Tech Stack
A “tech stack” is a collection of software solutions that work in sync to streamline and automate important aspects of your business’ day-to-day workflows. Common examples include platforms for project management, sales enablement, document management apps, analytics but to name a few. Dedicated automation tools, which have grown to become increasingly powerful in terms of functionality over recent years, are also worth exploring.
Well-chosen software can significantly reduce costs and limit the amount of time that employees spend on repetitive, menial tasks. Opting for apps and software solutions that integrate with each other (thus allowing for the seamless exchange of information between platforms), adds a further layer of efficiency to your internal operations.
7. Commit to Ongoing Growth and Improvement
When a small company becomes successful, it is easy for managers and founders to become complacent. They assume that the strategies driving success during the good times will be effective again and again and again.
This, of course, is a mistake. Markets are constantly in a state of flux. Thus, it becomes undoubtedly necessary to build mechanisms to understanding and adapt to change to ensure the success of the business.
A commitment to growth will ensure that core business practices, strategies and structures are all each in a state of continuous review. In this way, they will be tailored to mirror changes in the broader market.
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