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You might be the world’s most proficient accountant, resume writer or artisanal baker, but your small business will eventually suffer the consequences if you lack business sense.
Once you obtain the necessary permits and licenses, get incorporated and offer a legitimate product or service, you’re a business owner — on paper, at least. But keeping a successful business up and running is a different story.
You’ll run into roadblocks that can threaten business viability if you overlook critical administrative tasks like bookkeeping or maintaining relationships with high-quality suppliers. In fact, the top reasons for new business failure include a lack of marketing strategy, having no plan for how to scale the business to meet growing demand, or offering a poorly conceived product or service with a too-small total addressable market (TAM).
According to stats published in 2019 by the Small Business Administration (SBA), about 20% of startups fail in the first year, while half go under within five years.
Here are some tips and tricks for keeping the lights on so you can avoid being just another statistic:
Proper documentation, time management, and automating repeatable tasks can mean the difference between boom and bust.
Keep accurate records of business finances: Record every transaction (customer billings and vendor payments) into the proper account at least once weekly and keep an eye on the bottom line. Keep copies of all invoices, cash receipts and cash payments for bookkeeping and tax purposes.
Set (and keep) deadlines: Stay on top of administrative tasks using project management software — this lets you set deadlines, assign tasks to employees and upload documentation to a central repository.
Plan ahead: Plan your social media campaigns in advance using social media scheduling software. Use email marketing automation to follow up with new leads. Use Slack, Zoom and Microsoft Teams for quick communication with your team. If something can be explained in an email, you don’t need to have a meeting about it.
Agile businesses can quickly pivot in response to changing market conditions, while the slow movers struggle not to become obsolete. Lean into your data and be willing to change course. Listen to customer feedback and don’t be too wedded to your own opinions.
For example, let’s say you’ve conducted interviews with prospective customers and it turns out your product isn’t well-received or the market for it is too small. Don’t cling to a business idea that won’t float. Be willing to change your business model or pricing strategy if your current approach isn’t working for you.
If your website isn’t attracting enough traffic, you may need to ditch that outdated WordPress template you love and debut a more responsive design.
Automating repeatable tasks saves time and ensures small things don’t fall through the cracks. Recently met a prospective client at a networking event? Use your CRM tool to automatically follow up with new contacts within 24 hours or send emails to new leads who visit your website. Use accounting software to automate your day-to-day bookkeeping so you don’t waste time on data entry.
Salvage abandoned shopping carts by sending an automated email to nudge shoppers to complete their purchases. If you don’t use payroll software, learn how to automate payroll management in Excel.
Can’t offer 24/7 customer support? Set up a chatbot on your website to respond to customer queries outside of business hours.
Small businesses are uniquely positioned to offer a personal touch — especially if you have a small team or run the company yourself. Handwritten thank-you notes go a long way. Or, you can include a simple gift alongside the purchase or offer freebies in exchange for reviews.
Use your CRM tool to make notes of personal details for each customer so you can offer more high-touch personalizations. For example, say you’re a jeweler who recently sold a custom engagement ring. You can send a simple wedding gift and a discount offer for a future purchase after the couple marries.
Intellectual property consists of the intangible assets — trademarks, copyrights and patents — that differentiate your ecommerce business from any other.
For a small business, this means protecting things like designs, business ideas and trade secrets. If a competitor tries to copy your product, they can erode your market share and damage your reputation. If you decide to register a trademark or apply for a patent, it’s best to seek an attorney’s help to make sense of the legalese and avoid making minor mistakes (eg: omissions in descriptions or drawings, missing deadlines) that can result in your request being denied.
Your website is the seat of your operations — it’s how new leads discover your products, and, unless you run a physical store, the sole method for people to buy from you.
Treat it as sacrosanct. Keep the design clean and simple — limit colors, banner ads and pop-ups — and invest time in proper SEO. Before you build a website, put some serious thought into branding. Branding builds trust and differentiates you from your competitors.
State your brand’s value proposition upfront so first-time visitors understand your offer. Take it from the search engine DuckDuckGo. Its homepage states simply: “Search the web without being tracked” — a worthy appeal to today’s consumers who are concerned about data privacy.
Use high-quality images (stock images don’t build trust) and hire a professional to take photos of all your products. Also, write thorough product descriptions — focus on product benefits, highlight key features and, where possible, tell a story.
For example, why is bergamot a great scent? What is the significance of the amethyst stone? What is the history of Chinese tea?
Post unique photos of your business and your employees on social media — people prefer human faces and real, behind-the-scenes footage over stock photos or videos.
Say you run a bakery. Find a way to bring people into the kitchen by filming your process. If you run a clothing label, create unique lookbooks featuring your female friends as models to show a variety of body shapes and skin tones, rather than hiring models from an agency.
If you’re an interior designer specializing in small spaces, upload videos on YouTube or start a podcast to share DIY tips for renters. Find ways to be authentic, share your expertise and tell the story of your business.
Web analytics, social media, CRM and financial analytics provide a readout on business performance.
For example, if your website is converting leads, how many potential customers you are attracting each month, whether or not people like your social media content and whether you’re spending more money than you’re bringing in.
These are important things to know. In fact, 67% of small businesses spend more than $10k/year on analytics. If you can’t measure something, you can’t improve it.
If analytics intimidate you, here are a few starting points to get you going:
Use your CRM data to understand your customers: What are their buying habits? What is the average order value? What are they likely to purchase next?
Assess the health of your website: What is the overall website bounce rate? Which product pages generate the most/least conversions? Use heat maps to understand areas where people tend to hover on your web pages.
Determine whether social media works for you: Which posts have the most/least engagement? If you use shoppable social media posts, what is the ROI?
Cost control is key to staying afloat — especially in the early days of running an online business. Establish a baseline to measure actual expenses against planned expenses. By looking at budget variances, you can see where your estimates are accurate and where they’re off. Look at where you went off track. What can you cut?
Maybe you can find a different supplier, or buy video editing software from another vendor that offers usage-based pricing since you don’t use the software as much as you thought you would. Take a draconian approach to eliminate inefficiencies like redundant/duplicate processes, underutilized software or unreasonable price markups from vendors.
Payroll is likely to be your biggest expense. Are there any low- or medium-level duties you can delegate to a qualified professional so you can take on a more strategic role in the business?
Use project management software to collaborate with others and create focused to-do lists daily. Also, stick to your original business purpose. Don’t try to be everything to everyone.
Naturally, you would like to expand your product line and enter new markets eventually, but if you’re still working on your go-to-market strategy and have yet to launch, don’t get distracted by pipe dreams.
Finally, productivity experts recommend working in one-hour blocks with a 15-minute break for peak productivity.
In most industries — especially retail — businesses compete on the customer experience rather than the product. Make it easy for your customers to get in touch with a real human on social media, messaging apps, email or even by phone.
Remember, a small business should be accessible. There is no excuse to present like a faceless corporation. If orders take time to fill or you’re creating a custom item, keep your customers informed of the process and manage their expectations accordingly.
If customers do complain, use active listening to understand their pain points, investigate the root cause and offer a resolution that matters to them.
Great customer service increases the lifetime value of your customers and helps attract and retain new customers. In fact, 86% of consumers say a good customer experience can turn them from one-time buyers to loyal customers.
Also, manage people’s expectations. You’re a small business with limited resources and scalability. You probably can’t offer 24/7 customer support or a two-day turnaround on a custom item. What you can do, however, is resolve issues expediently, deliver a consistently great product and provide personalized support.
“Omnichannel” isn’t just a corporate buzzword for Fortune 500s that deal in big data analytics. Think about offering a seamless experience across all of your marketing channels.
This can be as simple as ensuring consistent branding across all your social media channels and ensuring your website is mobile-friendly. However, try not to spread yourself too thin. While it’s best to meet customers where they are, don’t try to be present on every channel. Focus on a few channels to create the best possible experience on each one.
Your competitors know something you don’t and vice versa. Studying your competitors helps you define your competitive edge while finding your weaknesses relative to your rivals. Look at their tagline, unique value proposition and products or services.
Here are something things to look out for:
Digital marketing strategy: Observe their website and social media accounts. How do they generate traffic and leads? What do they post on social media? What kind of content do they publish?
Target audience: Who is their target audience? Is there any overlap with your customer base?
Strengths and weaknesses: Where do they excel? What are their shortcomings? What can you do better?
Small businesses have limited resources and can only offer a limited array of products compared to large corporations. Specialization is your best bet — especially if you are a sole proprietor offering a service — as this enables you to better iterate a compelling value proposition and define a target market.
For example “on-demand coaching for mid-career professionals looking to make a change” is a clear value proposition that defines the audience, the service and the reason why people might seek out your business as opposed to any other.
The best customer service is personalized, prompt and friendly. Use templates or scripts to deal with commonplace customer queries so you can respond with ease and professionalism.
Ensure the language you use to address your customers in emails and chats matches your overall brand voice.
For example, don’t be overly formal if your brand voice is chatty and easygoing. Chatbots, FAQs and knowledge bases are great ways to provide your customers with helpful resources so they can troubleshoot problems without having to call or email if they prefer.
Businesses live and die on the strength of their workforce — especially in the early stages. Find people who genuinely care about the business’s wellbeing and aren’t just looking for a job. Some people don’t appreciate the unique spirit of working at a startup — having the opportunity to make an impact and watch the business grow — so find those who do.
Alongside their talent and skill set, assess whether they’re passionate about their field. Did they research your startup before the interview? Do they exude passion when they talk about their prior work experience?
Vet quality candidates by creating a form with customized questions for each job application rather than accepting generic cover letters. This also creates a barrier to entry so you aren’t flooded with resumes. Ask specific questions that pertain to the competencies and soft skills you value.
Hiring a developer? Ask them to describe the most difficult API or software bug they’ve troubleshot. Hiring a marketer? Ask them to write 300 words on the most successful marketing campaign they’ve ever launched.
These are just a few current content marketing trends small business owners need to know or risk falling behind.
Also, Facebook, LinkedIn and Google are constantly rejiggering their algorithms, so if you run paid ads pay attention to the latest developments as this can affect ad visibility and reach.
An entrepreneur’s most important skill is persuasion — the ability to convince people to work for them, invest in their startup and try their product. You must be able to champion a product you’re passionate about and weather the heady highs and lows of running a business.
Never lose sight of why you went into business in the first place — perhaps you had a niggling small business idea that kept you up at night, you noticed a gap in the market or you wanted to share your expertise by offering your services to businesses or individuals who need it.
Set realistic expectations of entrepreneurship before going into business and decide if you’re willing to persevere.
That said, don’t take everything too seriously. Running a business should be rewarding. It should be a chance to realize your passion, achieve financial independence and spend more time with your family if those things are important to you.
It won’t seem like that in the beginning when you’re putting in 70-hour weeks to keep things afloat, but your hard work will pay off.
Business success looks different for every entrepreneur depending on the type of business you run. Business owners should set regular goals that evolve as the business grows.
For example, an early-stage startup might want to have positive cash flow within one year, while an established business might look to increase word of mouth referrals or tap new markets.
Running your own business is a journey unlike any other. Here are some tips for business success.
Successful small businesses are run by passionate entrepreneurs who also possess strong business acumen. To maximize your chances of success, keep accurate records of all transactions, cut costs wherever possible (without sacrificing product quality) and focus on providing an outstanding customer experience. Successful businesses offer products and services that ease a pain point, solve a problem or serve a passion.
One of the most helpful things a business owner can do is write a business plan. This document lets you define the scope of your business needs, startup costs and the target market.
In this way, would-be entrepreneurs can evaluate the viability of their business idea without sinking time and money into starting a business that will not succeed.
More than anything, small business owners are pressed for time. Using automation — email marketing, social media scheduling, lead generation — cuts down time spent on administrative tasks while ensuring nothing falls through the cracks.
Successful entrepreneurs also know how to delegate tasks and hire reliable employees.
Kindra is an experienced writer with a background in journalism in Southeast Asia and the U.S. Her work has been published in web publications including The Architect's Newspaper, The Brooklyn Reader, The Jakarta Post, The Justice Watch, Digital Journal and more. Currently, she's a copywriter for tech companies focusing on ecommerce, AI and machine learning.