Today, there are so many new startups popping up every day that most young entrepreneurs feel like it’s the quickest road to success. However, the fact is that only two out of ten startups survive the first 18 months of business. The infancy period of a startup is especially volatile for those entrepreneurs that don’t have any previous experience in running a business. There’s a range of reasons why a startup can fail this early, from unsatisfactory products and services to poor recruitment habits.
Having a plan for growth is vital to the success of any small business, which is why we’ve come up with a list of things you need to be aware of if you’re to take your business to the next level.
Cash Management
The biggest reason why so many small businesses have to close their doors is the lack of cash. This isn’t even about profit, it’s about not having cash at hand to successfully push forward. If you don’t have good cash planning, chances are you’ll go bankrupt really early and you won’t even know what hit you. How long does it take for you to collect payments from clients? Will you do it before you need to buy inventory? Are there any loans you need to pay back in the meantime? The more time you invest in cash flow planning, the better chances you’ll have at succeeding in your industry.
Talent Recruitment
You should be well aware by now that a business is only as good as its employees. While you may be able to micromanage everything in the very beginning, pretty quickly that will become an impossible task and you’ll become dependant on your employees to do most of the work. Talent recruitment isn’t all about getting the best people together and trying to make them work, but actually recruiting people that will naturally fit with the team. Someone may have all the skills that you’d want in an employee but isn’t as comfortable with the teamwork as someone else. In the initial stages, you should concentrate all of your energy into recruiting people that are likely to become leaders (not bosses) and help you build a great team.
Control of Margins on All Products and Services
A majority of small businesses out there are focused on launching too many products and services in order to boost their visibility in the market. This creates a situation where they don’t control the margins as well as may be needed, thus dragging their total profits down. Your total revenue should always come second, behind your profit, and if there are any products or services that you can get rid of to increase the overall profit of your business, you should do it as soon as possible. Even if you’re looking to sell your business at some point, buyers won’t be interested in the revenue you’re making, but only in profits. By controlling the margins on all your products or services, you’ll have a better insight into what needs to be done at every stage of business growth.
Marketing That Improves Your ROI
Most new small businesses just don’t have the know-how to deal with marketing in the initial stages. As it turns out, marketing is actually one of the most important things you can focus on when developing a business. Should you opt for SEO (Search Engine Optimization) or PPC (Pay Per Click) campaigns? To actually know what works best for you, you’ll need to test things out and, most importantly, ask your customers how they heard about you. Knowing exactly how you attracted each customer will help you focus on the marketing efforts that work well for you. It’s also important to stay in touch with current trends in IT services in order to best prepare for what’s coming your way.
Communication With Customers
From social platforms to reviews and testimonials, you need to be aware of what your customers are saying about you at all times. If you do a good job of knowing what your customers like and expect from your business, you’ll have a much easier job retaining them as loyal customers. Ask your customers to express their opinions and don’t turn your back to negative criticism—it can really help you understand what changes your business needs to go through to better satisfy your customers’ needs. Allow your customers to write product reviews and testimonials and you may also increase the conversion rates, as most visitors these days don’t buy anything without reading a review first.
Bottom Line
It may be difficult to push your small business through every stage of the business growth, but if you invest a lot of your time and effort into planning, you just may be one of the few that makes it through. Some small businesses will be doomed from the get-go, just because their products or services aren’t needed on the market. If that happens to you, get up and try again—and use that experience to make it work the next time. Failures are learning opportunities, and the sooner you accept them, the faster you’ll move forward in the world of entrepreneurship.
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