At the Small Business Centre, we’re always inspired by risk taking entrepreneurs who put their money, pride and effort on the line for a business they believe in. The sad news is that while some succeed, according to Statistics Canada, only about 70 percent survive for five years. What’s the difference between those who make it and those who don’t?
1. Successful businesses have a good plan.
The number one reason small business owners fail is lack of planning. Poor organizational skills, coupled with a knack for “flying by the seat of their entrepreneurial pants” is a recipe for disaster. Many businesses don’t understand their customers, how to reach them, or what they should be doing to maximize profits. They have no strategy, no road map to success. As the old saying goes, “if you fail to plan, plan to fail.” Cash is king. Yet many businesses are under-capitalized from the first day. Your business plan should detail how much money you need to start the business and where it will come from. Struggling with your own plan? Check out our business planning template.
2. Successful business owners are focused.
To be focused means to get organized, pay attention to what needs to be done, and try not to spread yourself too thin. Many entrepreneurs have their fingers in too many pies, and as a result they either confuse the marketing message to their clients or they simply can’t be good enough in any one area to create a lasting impact. Well-known consultant and television personality Doug Hall often preaches, “do one thing great!” The idea is that if you’re focused in one area and become known as the expert in that area, not only will people respect your ability, but they will be able to identify what you do more clearly.
Here’s the other upside – you’ll be able to charge more.
3. Successful business owners provide outstanding service.
In this difficult economic climate, small business owners cannot be cavalier about their attitudes to customers. Your customers are the lifeblood of your business. Consider the example of the neighbourhood butcher. Recently a new customer walked into a neighbourhood butcher’s shop and received such poor service from the unsmiling owner that he vowed never to return. Say that customer shops weekly and spends about $40. Over five years, that’s $10,400 in lost sales! If his actions cost him only nine other customers over the same time period (with similar spending habits) that’s a loss of more than a $100,000 over a five year period, by alienating only ten customers! Delivering a great experience every time will make a noticeable difference to the bottom line.
4. Successful business owners are great marketers.
Winning in small business means having the right product in the right place, at the right time, and making sure that people know about it. Market research will help with the first two. The final piece, making sure people know about it, is where marketing comes in. Marketing is more than placing a Yellow Pages ad or the odd piece in the local paper. It’s about having a strategy to reach your target market in a way that will elicit a response, and in this day and age when consumers are bombarded from every corner, this can be tough. Take a look at what your competitors are doing. If they’ve been in business for a while, they are likely doing something right! Networking, building a referral system, and pounding the pavement still work, and using new techniques such as social media and other online opportunities can be the difference between succeeding and failing. Great marketers are creative, they’re hard working, and they’re vigilant in their quest to reach their target market. Are you?
5. Successful businesses are led by those with the right attitude.
Great businesses are often run by great leaders; leaders who believe in their product, their staff, and their ability to provide value. In a small business, things will go wrong; how you deal with it often determines the difference between winning and losing. Great leaders have systems in place to avoid problems in the first place, but when things do go wrong, they find positive solutions. The owner sets the tone and vibe for the entire venture. If you are in this role, make sure you send the right message. Let that positive culture filter through your staff and all the way out to your clients.
6. Successful business owners are disciplined.
Being your own boss is one of the greatest experiences you can have. It allows you the freedom to work your own schedule, manage your own people, choose your own products, and chart your own course. The down side? When there is no one else to be accountable to, self discipline can be a challenge. Small business owners need to set schedules, budgets, marketing plans, and sales strategies and do whatever it takes to stay committed to the plan at hand. Discipline extends to managing cash flow properly, not making rash decisions, and guiding the business with a steady hand. Many small businesses have failed not because the idea or product was bad, but because the owner wasn’t disciplined enough to turn the business into a winner.
7. Successful business owners train themselves and their staff well.
Business owners are automatically seen an experts in their field. Clients expect you to know what you’re doing – that’s why they hired you! A commitment to lifelong learning is critical. Keep up to date with current trends and practices and you’ll come off like a pro. It will also instill a sense of confidence in your clients. Training staff is equally important. If you hire someone to represent your company, you owe it to them (and to yourself) to train them to the level that you would expect from yourself while interacting with clients.
8. Successful business owners like what they do.
Entrepreneurs are typically very involved, energetic people who are easily bored. Those who choose businesses they don’t like, tend to burn out quickly when things get tough or monotonous. Choose a business that you enjoy and your days will be more fun; indeed it may not even feel like work if you follow your interests and passions. The other spin-off is that enthusiasm is infectious; if you show that you love your work this will have a positive impact on clients and staff. Life is too short not to enjoy your days and inspire those around you.
There are many other positive steps that entrepreneurs can take to succeed. What tips have you come across that might help others? Please contribute by commenting on this blog – we would love to hear your thoughts! Once a month we’ll enter all entries into a draw for a chance to win a voucher for one of our upcoming seminars (value $20.)