Let’s start a business together.
In the first step, we will fill out a few forms, get the licenses, permits, get a good location, and start working from there. Yes, we will also advertise to gain a market audience.
Are you successful?
No, of course.
Let’s start again.
And this time we will start and run a successful business together. Before that, you must understand that the overall business climate may not be always in your favor. There will be times when you have to face troubles of any sort.
To that end, it has been observed by the Bureau of Labor Statistics’ Business Employment Dynamics only 50% of the registered businesses pass their 5th year anniversary.
The same source also mentions a few industries that have a higher survival rate. This includes healthcare and social assistance companies. They have a higher rate of survival as compared to the businesses that are registered in the construction industry.
Why Do Businesses Fail?
Although, you may not want to talk about failure as of yet, businesses fail and it is a fact we cannot ignore. But we can only learn from the mistakes that others have made. And the best approach is to avoid those mistakes in the future. Therefore, it is best to know what lacked in these unfortunate businesses and not commit the same mistakes.
Here they are:
- No Need in the Market: The Capitalist market runs on the basis of need and fulfilling that need. The customer wants a product and you have to provide that product. It is as simple as that. But, if the product you are producing or aiming to distribute is not needed, your business may fail.
- Money Matters: Yes, launching and running a business without enough capital also leads to failures. Until and unless you are providing the fuel as money to your business, it will keep on running. But as soon as you restrict the fuel, it won’t go ahead.
- Who’s on your team: A stronger and better team also matters for developing and running a successful business. Surround yourself with people who are smarter and can work better than you.
- Market Saturation: If there are more than enough competitors already working in the same niche as you, it would be really difficult to make your mark in the same market.
- Product Pricing: On the cost curve, if your product lies on a point where the majority of the customer cannot afford it, then the chances of succeeding are not very high.
Apart from these major factors, there are a few other reasons that may lead to business failure. It can be a bad location, ineffective marketing strategies, and others.
Running a business is like taking a risk and if you are taking a risk, then expecting it to pan out just as you had expected is not a good sign. Failing without expecting anything but just learning won’t hurt as much as failing after you have made extravagant plans out of your success.
Enough talk about the failure…..
This time we will understand how to run a successful business.
How to Run a Successful Business?
Every step matters and you must devise the proper strategy to become successful in your business.
- Understanding the Market and Know your KPIs: There is nothing better and more profitable than conducting extensive market research before you leap forward with your venture. In a world, where almost everything is accessible via the internet, conducting market research is both easier and essential.
Under the ambit of market research, you must try to accomplish the 4Ps of marketing.
The benefit of incorporating the 4Ps is that you can create a great market plan that can be realized with careful and smart execution. Another benefit of making a plan from the 4Ps perspective is that you will get you to know your launching point.
Learning new marketing techniques and skills is also a must. To that end, you can also check out the 8Ps. The evolution of 4Ps has led to the 8Ps of marketing. In this you may also add; People, Process, Physical Evidence, and Performance.
One thing that businessmen fail to account for is the development of their personal goals. Developing a business without developing yourself is also not good for your business.
You have to set some personal goals and develop ways to accomplish them.
- Drafting a Business Plan: A business plan is the next important aspect of running a successful business.
How would you be able to resonate with your goals if you have not made a set business plan that defines your approach and the number of efforts you need to put in.
A business will include:
- Company Profile
- Documenting every bit of profit, sales, and expenditure
- Adaptability of your product
- Your Vision and Mission
Creating such a business plan will help you communicate your goals with all the stakeholders in a better way. And it is very easy to draft such a plan in the current scenario.
You can make digital documents and also share them with your stakeholders only to ensure that you, your team, and everyone involved in running the business are on the same page.
To help you with it, here are a few examples of good business plans, templates, and frameworks that you can look at.
In the end, you must create workflows and set some strong precedents to follow. If you have some limits, try to go past it. Write down your business plan, learn it, and execute it with precision and goal setting.
- Revenue and Profit: Cost matters and so does the profits. In the age where the money is fuel for almost everything, we cannot ignore this aspect. And your business is at a nascent stage. You must be extra cautious about how you work and account for everything.
You must account for every dollar spent and earned. Be it the production costs, rental, staff expenses, and all other sundry costs. Contrary to this, you must also include the sales and revenue generated out of the product or service distribution.
Try to extrapolate your earnings on a monthly, quarterly, and yearly basis. This way you may come to know how fast and well you are developing.
This is also the time to revisit your pricing structure. Is your product priced correctly? What must be the total number of sales to reach your monthly, quarterly, or even yearly goals? More importantly, do you have the right way forward in place to accomplish that goal?
Your Human Resources Team: Employee engagement and creating a good company culture has some great benefits for the overall development of the organization.
Cover all the fronts with intuitive and efficient human resources practices. From training, recruitment, orientation, in-house development, to exits, develop strategies for all of it.
Due to proper training, the employees will understand what to do in every situation. They will be able to better judge the situation at hand. They will be able to make better decisions.
Employee Engagement measures are known to increase employee productivity. As the employees find themselves in a more comfortable and relatable environment, they are more likely to recommend working at your workplace to your friends.
Another thing that you can do is conduct team performance review sessions. It can be monthly and quarterly review meetings. These steps increase two things. One is that they enhance the performance by letting the employees understand their power points. Secondly, they increase trust among the employees.
Creating an amazing and positive culture within the organization especially the small business is vital. This way you can attract some great professionals that will only benefit your organization.
- Right Employees Means Growth: It is fine that you do not own a sports franchise, but you own a company and it is here you can gather your own dream team.
Employees are the backbone of a company. Good employees led by a good leader will always take the company forward. And if you are a good leader, then you must hire proactive employees.
For a new business, capital is scarce. There are already a lot of expenses involved in the other works. The way out is hiring smart and efficient employees. Surround yourself with people who are smarter than you.
With this attitude, you will be able to build a strong team. Furthermore, take their perspectives in the decision-making process. Your company culture has to be surrounded by a sentiment like “when you win, you all win”.
Being an entrepreneur is not like you have to do everything yourself. At some point, you will have to entrust your tasks and responsibilities to someone else.
Start doing it now!
Delegate your tasks, all the while taking good care of your employees. Hiring employees that have some specialties and can work better in their niche is also suggested.
Further, you can also hire the services of some freelancers and outside agencies to decrease the workload of your employees. Outsource some of the work. When your company is still new, that is the right time to create a good and effective company culture that promotes camaraderie and cohesiveness.
- Benefits to the Staff: Your staff and employees are the key to take your company forward. Some startups have been known to operate out of coffee houses and even from the founder’s garage. Yet, they were successful.
Because they took care of the employees and the employees took care of the work. While you are hiring new employees, set a budget that you can afford for every employee. Then share with them what all benefits they will be getting once they are a part of your company.
Also, it is essential to understand the benefits and perks that are essential to be forwarded to all the employees because they are stated by the law. So, it is better to know the laws in your state and then provide those benefits.
Apart from the necessary benefits that you must provide, you can also choose to offer some extra benefits. This may include:
- Insurance benefits
- Retirement allowance
- Paid holidays
For this, you can also check out what other benefits other companies in your niche are providing and then match it with what you can and are providing.
- Using the right Tools: Due to the wide availability of technological tools and software, it has become easier to perform the majority of the functions within the organization.
We have applications (both web-based and downloadable), Saas Products, and other proactive solutions that can help you perform different functions.
Added to this, the costs of using these different technologies is also decreasing. This makes it possible even for smaller businesses to leverage these tools and technologies.
However, this also raises an issue. Due to the wide availability of these technologies, it becomes difficult to choose the right solution for you.
Here are a few tips to help you make a better choice:
- Write down the processes for which you need a tool or software.
- Shortlist all the tools that can help you complete these processes and then analyze which tools can help you make these processes easier.
- In the next step, compare the value that the tool provides and the costs associated with it.
- In the last step, also account for its scalability and ease of upgrading it. Any tool should be able to meet your ever-growing business needs.