If you have a small business or you are setting one up, there can be many pitfalls. There is not a single small business owner who hasn’t said “I wish I’d known that!” in retrospect. At some point there will be some mistakes; they are a natural part of life. Every business is different, and every business owner has their own approach to it. This may be true, but there are some key things to success in small businesses. We share our top ten key tips for being successful from those who know.
1. Go with what you know
It is one thing to see a gap in the market. If you have no skills in it though, it is going to be expensive and hard work. Start by thinking where your skills lie. Perhaps something you have previously worked on. Or maybe something you love to do. Setting up a café is going to be so much easier if you know your latte from your cappuccino. Setting up help for silver surfers will be best if you are good at explaining things. Is there something you know about that has a new aspect you can develop? There are so many options, sticking to what you know can have a huge impact. Taking this a step further, do something you love and it will be much easier to enjoy it.
Do you need to have some additional training? Do you aspire to make celebration cakes but need help getting used to a commercial kitchen? Or do you need to undertake some food hygiene training? This is to verify your practices are as safe as possible and will not make people ill. Is there anything you need to do to be legally compliant? Do something you know and you will be aware of some of these things. Start something unfamiliar from scratch and you could be at a serious disadvantage.
Take the example of Robert Earl. He completed his degree in Hotel and Catering Management. He set up very successful medieval themed restaurants in the UK in the 1970s. He then moved to Orlando and set up medieval and wild west themed restaurants. Since then he has continued his business building many well know chains, not least Planet Hollywood. He has diversified and worked on some different things. However, he has always stuck to hotels and catering as this is where his knowledge lies. He is obviously very good at it too! By doing something you know, you have an improved chance of success.
2. Spend time researching the market
Whether you do it yourself or get a professional to do it, researching the market is an absolute essential. Think about your competition, what is already nearby? Or if it is online then who is your biggest competitor? Think about how busy the other outlet is. Really, you’re either doing something that is already done or doing something new. If it is something already done then you need to take custom away from someone else. Or you need to do something that new people will be interested in. For example, it could be an ice cream parlor and there could be one down the block. You will need to make their popularity base come to you. It is unlikely people who don’t go to an ice cream parlor currently, will suddenly come to yours. Unless that is you are doing something quite different and exciting, or there is a benefit to them.
If it is something completely new then you need to know people will want it. You can find this out by asking or doing questionnaires. Of course, if you ask friends and family they may just say what you want to hear. If it is a service such as fixing computers then you need to wait for people to have a problem. Even if people were enthusiastic about it, their computer might not have a problem for years. Remember only a proportion of people will take you up. Can you afford it if only 10% or 20% do? Part of researching the market is ensuring that you start with sound figures. How many businesses have failed in just a few weeks? The majority of times this is simply running out of money. It takes time to get customers to come to you. This goes for whatever type of business it is. Do not expect overnight success or even success in the first six months. Some businesses like online drop shipping require very little risk and output initially which can be an advantage. However, some cannot avoid it, so keep this in mind.
3. Have a defined purpose and plan
What will you do? Can you define your purpose in a simple sentence? If not then perhaps your purpose is too complex when starting out. It can be wise to write a mission statement detailing your aims. However, that one overriding purpose is going to be your mantra for the first few years. It might be “I want to set-up the best elite boxing academy for girls in the country”. It could be “We want to offer relevant and sensible online mentoring support to everyone”. It doesn’t have to be clever or fancy, but it is the reason why.
Set-up a plan of everything you will do. Split it into things you want and things you must do. Give everything an order and a date. Be kind to yourself in this plan and realistic. It is so heartening to reach milestones and targets. On the other hand, it can crush you to miss a lot of them. So give yourself some leeway – you will likely need it. Work the two lists in parallel and don’t do everything on the must do list first. Pick and mix to maintain your interest. Also, be willing to change things where needed.
4. Be willing to work hard
This sounds so obvious it is almost ridiculous. Having said that even the most successful business owners did not know just how hard in advance. It is not like working for an employer. You could easily be working 15 hours a day, 7 days a week. This might be what you need to do to get a good output. Or just to not fail. This will not be forever, but it will probably be the start. It is your business. You will need to be fully committed and willing to put everything into it. You are going to be the only difference between it being successful or not.
On the other hand, seeing something you have nurtured being successful is incredibly rewarding. Yes, it is going to be long hours, lots of money and every bit of your mental energy. Once you start building up customers and you can see the impact on them, it is worth it. If you are well prepared then no doubt, it will be a success in time. Perhaps you have set up a bowling alley. It takes a while, but families come and some leagues move in. Then you see that you are having a positive impact on people’s lives. That is worth the hard work as you embed your business.
5. Use every resource available including marketing
Resources are a really important part of any business. This is the part where you swallow your pride for the good of your business. Call in every favour you are owed. This might be some training, advice on insurance or the promise of working some Sundays in the next year. It could be technical expertise or money owed. It could be spreading the word. If you need equipment, could it be second hand at first? Can you borrow anything from a friend? Think about any compromises you could make in the meantime. Ask advice about everything- things to do, things to avoid. Use every resource available.
Do not for a second underestimate the power of marketing. It is essential for a small business. However, that does not mean it needs to be expensive. All small businesses benefit from a well maintained Facebook and Twitter feed. This should contain pertinent information like contact details and pricing. Have an online newsletter, give people entry into a prize draw for giving you their friend’s details. If online only then a discount code or pay per click marketing can be useful. If a physical shop, discount vouchers and relationships with other local businesses can be great.
6.Bring on the best people on board and treat them well
One simple piece of advice. Employ the best. You will get so much output, ideas and profit out of a hardworking and trustworthy employee. A great communicator is a bonus to any business. Ensure they really value excellent customer service too. Good people are like gold- get them and cling to them. One great employee is preferable to three mediocre ones. Once you have them, you will need to work to keep them. A great employee will always be in demand elsewhere too. Employ some strategies to support your employee and they will equally enjoy their work.
Ways to do this include making them feel truly valued. Give them regular reviews. In these you can feedback any issues and identify any opportunities or training available. You can also ask them for ideas about the business. Their feedback could be so valuable. Can you additionally give them benefits for their friends and family to extend your word of mouth? Can you offer them small bonuses or a discount to shop with you? Can you give them more responsibility based on goals they can achieve over time? You are going to rely on some goodwill from them at some time or another. Give some back.
7. Have a great product at a great price with amazing service
Try to do one thing really well. Without a really great quality product (or range of products) at a fair price, it is hard to succeed. Dollar stores rely on selling a huge volume each for a small profit. The quality of some of these products is questionable. Yet, people are willing to accept something that is of a lower quality that is just a dollar. The likelihood is you are not going to be selling super cheap products. Therefore, you need to be selling something good at a fair price or people simply will not buy. Whatever you do, try to do it well and that might include presenting it nicely. Make it desirable or necessary for people whether it is scented body lotion or acne lotion!
Always try to exceed the expectations of your customers, and never over promise then under deliver. That is at the heart of poor service. Get it right first time and deliver on time. That could be serving people at your bar in the right order. It could be using the correct color of hair product in your beauty salon. It could be ordering a customer the correct book into the shop. Whatever it is, do it right first time and give fantastic service because you want to.
8. Know your figures
Your figures are absolutely crucial in business. They are the actual difference between success and failure. This is everything from the cost of setting up to the cost of equipment. The correct pricing of your products and paying staff are equally essential. When you come up with your initial plan ensure everything has a real-world cost. You need to make sure that you have enough funds to cover this. That might be a loan, but the money needs to be there. You then need to plan for the unexpected. These are things you cannot know about in advance. This does mean you are ready if the unexpected happens.
Be realistic with your figures. Do not expect a million dollar revenue selling cupcakes, in the first year. It is so unlikely it will happen. Do not forget all the regular costs you will have that you will need to pay out. Ask friends who own businesses what some of their costs are. There may be some costs you have not expected. You can then include these in your plan. By building up a full picture you have a chance there will be fewer unexpected things. Knowing your figures can save your business and see it run successfully.
9. Serve the wider community
Supporting your wider community can be something that really helps you and them. Whether this is help ‘in kind’ or monetary help, they will support your work. Can you support or host a community event? Or is there a community event you can mesh in with and support? Can you help a local charity? Could you give a prize for their sale or offer sponsorship? Can you provide refreshments or even pin a poster on your noticeboard? Can your staff offer a little time, could you have a fundraising box on your counter? There are so many things you can do to help develop local causes.
Once you have been involved in a cause, initiative or community event, you can build followers. Not just users of your service or customers of your business. Followers are people who not only use but promote your service. If the organiser of a community event tells everyone how kind your business was, this is positive marketing. Be generous and generosity will come your way too. Then you will begin to demonstrate a commitment to the local community. Those most engaged will be grateful for your involvement and you will have done something positive.
10. Create and add new revenue streams at the right time
There is a difference between diversifying your business and expanding your business. You might want to diversify and add some additional revenue streams. You may want to do this because things are not going so well. If you have a café, you may want to offer to do outside catering. This may be due to lack of sales in the shop, so this is an additional revenue stream. You do it because it is necessary, and that can have a positive impact at a vital time. At other times your business might be going well and you might want to create new business opportunities.
Ensure you are making enough money before you branch out. You might have a medium sized floral shop that is doing well and you just paid off a big loan. You decide to open a second one five blocks away and it all goes wrong. This might be because you had to leave a junior person in charge in the other shop. Their customer service skills are not as good and the customers are no longer happy. This alongside trying to build a new customer base in the new shop. This can happen so easily, therefore have a robust plan for building your business at the right time.
There are so many important considerations when being successful in business. Ask any small business owner and it is full of pitfalls. With some of these ideas however you can build your business your way. Learn from everyone else’s mistakes and minimise your own. You have the power to make your business a success with all the right planning. Have faith in yourself and your abilities in order to make a good start on this. You have to start with self-belief and a lot of hard work, but being successful is definitely possible.