When it comes to running a small business, “success” can feel like a moving target. For many, profitability is their measure of success. But here’s the thing: businesses take an average of two to three years to become profitable. That’s a long time to wait to learn if your initial hard work paid off!
Looking to set your small business up for success down the line? We’re here to help. Read on for our 3 top tips to set up your business for success.
Make a Business Plan
A business plan is a key document for all small businesses. For one, your business plan is an essential document for investors, partners, and more. More importantly, however, a business plan will take you through a number of different exercises that are vital to the success of your business.
Any holes in your planning will be revealed through the creation of your business plan. That way, you’ll have time to fix them before it’s too late.
The different elements of your business plan are as follows:
- Executive Summary: Summarize your business in an easily digestible way. No need to go into detail here; you’ll go into depth on each element later.
- Company Description: What is your company? What problem do you solve? How did your company come to be?
- Organization: What is the structure of your company? Who are the key figures? What are their stories?
- Product: Explain your product or services.
- Market Analysis: Perform market research and include the findings here. Who is your audience and how will you appeal to their needs?
- Marketing: What is your growth plan and how will you reach your customers?
- Financials: Provide both details on your current funding and funding requests. Include forecasting.
As a small business, each member of your team is essential and should be chosen carefully. In addition to interviewing potential team members for competence and skills, interview for personality, too.
Small businesses need team members who are dedicated to their company and passionate about success. Do not hire an employee with a “work ends at 5 PM” attitude. Instead, hire employees who are willing to do what it takes to help the business succeed.
Remember that a sharp person can pick up on most skills quickly. In many cases, it can be better to hire a person who is a strong personality fit with less experience, rather than an experienced person with the wrong attitude.
No matter who you want to hire, learn how to run a background check and do so on every prospective employee. This will help protect your business from someone who is trying to take advantage.
Cut Costs When Possible
There’s no way around it: starting a new business is an expensive endeavor. Barebones microbusinesses can launch on around $3,000, but a small business typically needs much more for launch. Once you’re up and running, the costs don’t stop. As your business grows, the expenses do, too.
No matter how much funding or investment your business receives, it’s important to preserve that money for necessary expenses. Ask yourself: what are my necessary expenses?
Obviously, “necessary expenses” differ for every business. The costs of manufacturing your goods is a necessary expense for every company, as are your employees’ salaries. But a variety of other costs may not be.
Consider whether you need the following:
- Office space: Could your employees work remotely? If so, you could cut costs not only on rent and electricity, but on furniture and other office setup costs, too. Plus, a fully remote company opens your doors to talent from across the nation.
- Advertising: Perform regular analysis of your marketing efforts to determine whether your most valuable customers are coming from. Is it paid advertising or organic marketing like social media and customer referrals who drive your business? Cut paid advertising that isn’t pulling its weight in customer referrals.
- Paid tools: Are all of your paid tools utilized? Are there free alternatives that you could be using instead? There are so many free alternatives to expensive business tools. Take a look at your current subscriptions and whether the features your business utilizes could be available on a different platform for free.