Growing Your Small Business
As per the National Business Capital and Services, more than 21% of startups fail in the first year. That's because success requires consistent planning, grit, and strategic execution. You also need to recognize resources that can help you amplify your growth.
But how, precisely, can you do this?
Here are some tips for surviving the launch phase of your small business.
Keep A Close Eye On Cash Flow
According to the Federal Reserve Banks, 79% of small businesses have an outstanding debt. This makes it imperative for startups to monitor their cash flow, especially during the early stages. The following are a few steps you can take to manage your company's finances:
Track Your Expenses
Successful startups spend money only when necessary. And if budget allows for it, invest in automated cash flow management tools that are secure, time-effective, and efficient at bookkeeping.
Build An Emergency Fund
Although emergency funds aren't usually a priority for startups, it's essential to build one for your business. They can help you circumvent unfortunate circumstances and unprecedented situations.
Create Late Payment Policies
Almost 40% of businesses believe that late payments from clients are detrimental for the company. . When the firms fail to receive payments from clients on time, they do not have the funds to invest in inventory or hire more workers for their growing operations. Implement an effective late payment policy that compels the clients to submit their payments on time.
Employ An Intelligent Approach To Financing
Most businesses have a preconceived notion that the money they invest would somehow be directly proportional to their income. But, unfortunately, that's never the case.
So, research your options and only invest in tools and resources that are necessary and provide a maximum ROI. You can also use free online tools for small businesses to get the most out of your business.
Build A Sales Process
A viable sales process enables you to scale your business in the survival stage and over time. The sales process includes:
- Research: Understand your competitors, your customers, and market trends. Make use of market research tools to gather as much data as possible.
- Prospects: Create an effective outreach strategy to build brand awareness, target customers, and recruit workers.
- Evaluation: Identify your customers' needs and tailor your products and services to fulfill them.
- Advertisement: Emphasize the unique features of your products.
- Feedback consideration: Ask your customers for feedback and implement the changes mandated by their response.
- Referrals: 90% of customers trust the recommendations of people they know, thus making it imperative for new businesses to create a strategy to increase referrals.
Ideas Are Good, But Execution Is All That Matters
Take the time to create a plan of action to achieve your business objectives. Set realistic goals and measure the progress at every stage. You must also be open to changing ineffective strategies. But most of all, stay resilient to meet your objectives one way or another.
Secure Proper Investment
Increasing competition has made it extremely difficult for SMBs to thrive without adequate funding. And this is also one of the main reasons why companies fail in the initial years. So, explore the funding options for your startups. These may include:
- Angel Financing -investment in exchange for equity in the company
- Crowdfunding – funding acquired from a group of investors
- Small business credit cards- credit cards provided for business expenses
- Venture Capitals- private equity financing for startups
- Small business loans- types of loans granted by lenders to fund startups.
However, if you are not comfortable with the idea of getting external funding for your business, you can search for the best business to start with little money.
Focus On Customer Service
Research shows that 93% of customers prefer a brand due to its exceptional customer service. Therefore, as you scale your business, it is crucial to focus on enhancing customer experience. You can:
- Take regular feedback from customers and clients
- Respond to messages and queries promptly
- Track performance of your customer service representatives
- Use customer service management software to streamline operations
Find Good Supporters
92% of entrepreneurs state that mentors have a direct impact on their business's growth and survival.
A business mentor can provide guidance and counseling and help you lay down long and short-term objectives for your business. They can be someone you know, an expert in your industry, or someone who provides a mentorship service to entrepreneurs.
The first few years of the business are critical to its growth. To make sure your business grows into an established firm, study and compare the characteristics of successful companies and integrate them into your business plan. Then, you can use the tips mentioned above and implement them to introduce stability to your startup.
Copyright © 2023 SCORE Association, SCORE.org
Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.