Did you know that half of all new business startups fail within the first 5 years? That’s a startling statistic, particularly if you’re a small business owner and a dedicated entrepreneur.
But no need to despair, for there is hope! If you’re looking for inspiration as a business owner, check out this amazing site full of detailed, inspiring business success stories on the other side!
If you’re looking for some quick tips on how those other people in the stories succeeded, while their competitors often did not, read on.
There are numerous interrelated factors that play a part in determining whether a small business ultimately succeeds of fails. It’s not just having a great idea, or “luck,” or having the “right” personality.
Business success is, in fact, largely determined by smart planning and good old fashioned hard work in the execution of your plans.
Here are 3 tips on how to make your small business both survive and thrive for the long term instead of ending up “a statistic:”
1. Create your own niche
Most businesses belong to a fairly well populated industry, and competition can be tough, to say the least. In order to gain a competitive advantage, you have to engage in what’s today often called “market differentiation.”
In other words, you create your own niche within the general industry by offering something a little different and a lot better – in at least one key aspect that consumers care about. Maybe that translates to a more durable product, faster service, greater affordability, or more thorough customization.
You probably can’t outperform everyone on everything; but you have to excel above your competition on something if you expect customers to choose your products/services.
2. Properly gauge consumer demand
A business can suddenly exist simply because an entrepreneur had an idea and decided to set up shop and sell that idea. But it’s only going to continue to exist (very long) if a genuine and sufficient demand for the product or service also exists.
You can, of course, create demand if your idea is good enough and unique enough, but you still have to predict it. Otherwise, you can’t formulate a business plan, and without a plan, you’re almost surely doomed to failure.
Many new startups fail because, in the attempt to create the market niche mentioned in #1 above, they overdid it and ended up shrinking their market demand to the point the business couldn’t survive. So it’s about balance, in a way.
You need something unique enough that you capture a niche, but not so idiosyncratic that your captured niche market is too small.
3. Customer acquisition & retention
If you open a franchise, you’ll have a ready-made customer base, which you’ll have to essentially “pay for” in ongoing franchise royalties. That’s a trade-off, and it can be a winning one either way.
With new startups, you have to work to create your own customer base from the day you open your doors for, perhaps, years, before it is solidly established. And even then, you must pay attention to maintaining and continually growing it. “You grow or you die.” That’s the simple fact of life in the business world.
Great customer service is the cheapest and most effective way to retain customers – and gain them. That’s because, word gets around about both your customer service and your product/service quality, and many of your most loyal future customers are going to come to you via referral from current/past customers.
Investing in advertising, and diversifying your media venues, will bring new “traffic” to your website and/or doorstep, but you then have to give those prospects “service with a smile” that’s a step above the rest if you want to “convert” them.
There is much more to making a small business succeed and grow, such as managing cash flow properly and delegating tasks instead of trying to do it all yourself. But the 3 areas we’ve looked at are arguably the most important of all — follow them, and you’ve laid for your business a solid foundation.
