Growing a small business is a lot like growing a bonsai tree. It requires constant maintenance, care, and love to flourish and succeed. Yet, as many first-time entrepreneurs quickly find out, even the slightest inconvenience can make it wither and die. According to SBA, 30% of small businesses fail within the first two years, and another 50% fail after the five-year mark. However, this doesn’t mean that people shouldn’t give entrepreneurship (or bonsai trees) a chance; just that they need to be a bit more prepared beforehand. In light of this, I’ve compiled a list of five awesome ways small business owners can prevent these failures from occurring and grow their business instead.
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1. Avoid getting too much into debt
If you’re an entrepreneur, chances are you still have some outstanding debt to pay due to acquiring capital for your small business beforehand. This, however, can get you in a vicious cycle of lending and borrowing, as your credit rates slowly eat all of your precious profit away. The best way to tackle this issue is, in fact, to avoid it altogether; try bootstrapping. It allows you to start a company with minimal investment, keeping you safe from loan sharks and bad credit rates that plague the market. That way, as you grow, your business follows suit. Other, alternative ways of raising capital include: crowdfunding, investors, pre-sales, etc. Just remember to pay off all your debts ASAP, or you’ll slowly bleed to death.
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2. Double down on your marketing efforts
In this day and age, if you wish to make it in the business sector, you need to have a strong online presence. Meaning, you need to get active on social media; work on creating a responsive—and user-friendly—website; and start developing a content marketing strategy for your blogs and forums. That way you increase brand loyalty and build awareness. In essence, 80% of your profits come from just 20% of all your customers—this is why you need to invest so much in keeping your current customers happy; a loyal customer is a returning customer. So, get out there and start building a name for yourself; oh, and don’t worry, if done correctly you should see an ROI in no time.
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3. Build strong business relationships
In essence, clients are the lifeblood of your small business; without them, you wouldn’t even be here, and the same goes for your business partners. Therefore, you ought to treat your more prestigious clients and business partners with the respect they deserve. For instance, if they have to travel a long way—say another country—to reach you, get a Rolls Royce Hire to pick them up at the airport and drive them back to your HQ with style. Remember, the first impression is the most important and you want to portray your company in a good image, even before they get to meet you. That way, you develop mutual respect and understanding, building a long-lasting (and profitable) relationship for both parties.
4. Learn from your competitors
Keep your friends close and your enemies closer. Competitors are not your worst enemy; if anything, you should be thanking them for showing you the ropes of the trade. Instead of running away, you need to keep an eye on them, study their movements. Essentially, you need to find out what’s working so well for them, and what’s not, and then try to integrate those strategies into your own campaigns. Coca-Cola and Pepsi do this all the time. Their century-old feud (appropriately named ‘soda wars’) is legendary, each trying to get the upper hand over the other. For instance, last year Coca-Cola released its new sleek cans with ‘Millennial-friendly’ flavours. Pepsi quickly followed suit with a Kendall Jenner commercial (but not quite hitting the mark). So, use your competitors’ knowledge against them and fight fire with fire.
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5. Save money for rainy days
One of the most common reasons small businesses fail is due to having serious cash flow problems. In essence, the dream of every entrepreneur is to ultimately expand and grow their business. However, stretching your resources too thinly, too soon, will only hamper the progress of your small business. Instead, what you should be doing during the ‘Golden Ages’ of your business is saving money. Now, this might seem counter-intuitive at first—considering you’re doing so well—yet a budding small business cannot sustain itself for long; especially so in the case of financial troubles caused by natural disasters and the like. It pays to be prepared.
So, now you know exactly how to groom and maintain your small business. Keep it up and never lose hope; it just takes some time and dedication, but the results are worth it.