7 Survival tactics for running a small business
For small business, every day is a jungle out there. And while plenty of businesses start out excitedly swinging from the vines, many struggle to survive and thrive in the wild. In fact, according to a UTS study:
- 33% close within the first year
- 50% last less than two years
- 75% last less than five years
No business plans to fail, but many fail to plan
There are many reasons for this high fail rate. One of the biggest these days is that entrepreneurship is encouraged more than ever and so it should be.
However, it also means many start-ups are fuelled by enthusiasm instead of basing the business around a solution to a problem that enough people want solved.
Even if you have an in demand product or service that people want, you need good planning and smart management to compete and win in the business world over the long term.
Here are seven tactics you need to clip on to your SME loincloth if you want to be King or Queen of the jungle.
Is your brand just another face in a crowd? Is there enough in your products or services that people can see they stand out from the competition? Are you too general? The jack of all trades, but expert at none?
A USP and speciality can attract attention and lure more loyal customers. Take a look at Domino's Pizza's famous USP, "You get fresh, hot pizza delivered to your door in 30 minutes or less - or it's free" which powered them to the number one position in the Pizza market.
Focus on Marketing
Constantly look for innovative ways to promote your brand and business. Not expensive frontline platforms like TV. Look at personalised direct mail and local billboards.
Being creative can help smart, low-cost marketing at a local level is possible with affiliates, community events, radio and creative use of flyers.And, of course, the digital space. Google search and content marketing possibilities throw up relatively cheap but effective advertising and customer acquisition results.
Social media is another potent area that can be cost effective and also help spread the word. Keep your website and social media pages fresh and relevant.
You need to know your industry and audience demands inside out. Stay abreast of developments and surround yourself with experts and experienced people to ensure you are ahead of the pack.
To help stay up to date with industry challenges, opportunities, and trends, you could:- Attend conferences or local events, and sign up for training
- Read newspapers and news sites/Look up blogs and websites
- Subscribe to journals/magazines
- Listen to podcasts/watch videos of industry leaders
- Engaging in discussion social network forums, online groups or private forums
Pricing with an eye on increasing revenue is always tempting, but you need to understand your market, what people are willing to pay and how much each sale is costing you. Not just in wholesale prices, but time, staff, marketing etc.
In a crowded, competitive and aggressive market price has an enormous influence. The problem here is that customer loyalty is usually very low. If someone else offers something cheaper, they won't stick around.A better approach is to look at markets where you can offer more value than just a good price. It might be amazing service, a loyalty program, etc. Then you can look at increasing prices and ROI selling to the right long-term customers, rather than lots of less profitable clients.
Customer and Quality focus
Following on from the point above. Listen to your audience and deeply understand their needs. Successful businesses especially SMEs - need loyal customers who don't just add to your bottom line. They're ambassadors and influencers for your brand.
How responsive you are to their needs and how valuable you make them feel should be reflected in your products and service. Constantly, take feedback from your clients to pre-empt any issues or changes in sentiment.
Build the right team
Ultimately, it's the people that keep any business afloat and cruising. So don't just employ anyone. Find experts, people who are better than you at their jobs, to be part of your team. But also ensure you like each other.
After all, it's likely that you're going to spend more time with them than you do with your family over the next few years.Have a clear understanding of what each employee costs your business and what they need to be achieving to help you increase sales, profits and ROI. Then believe in them and reward them.
Evolve and diversify
In the early days, your capital and efforts should be focussed on your initial business plan and goal (you have one of those, right?).
But, as you grow, be on the lookout for any opportunities to diversify or adapt without impacting the core business. In this turbo-paced world, being 'agile' is critical for your growth and survival.It might be a new product or service that, or simply adding e-commerce or online options to you mix. Or if you're exclusively online, opening a physical location.
If you're in need of expertise and experience in helping small businesses take off, grow and thrive, remember that the Snap team are always here to help.