Half of new businesses do not stay open long enough to celebrate their fifth anniversaries. According to the Bureau of Labor Statistics, about 50 percent of small businesses fail in the first four years.
This could be troublesome news to entrepreneurs with a dream of owning their own business. However, you merely need to read further into the statistics to realize that the other half of the businesses not only survived, but continued to thrive. It is possible and it absolutely can be profitable to own your own business.
There are four tips for maintaining a successful business: following systems and processes, knowing your numbers, marketing, and communicating. Some of these tips require immediate attention and others must remain top-of-mind at all times.
1. Follow Systems and Processes. These words are thrown around often with regard to the function or operation of a business. You frequently hear, “The business isn’t successful because there are no systems in place,” or “Not everyone is following the proper process.” Many times, employees state that they didn’t know there was a process in place, or they weren’t trained on the rules.
Systems determine how you want your business to run. Creating a system of accountability means that each team member understands what the job is and who is responsible for making it happen.
Processes are the steps required to get things done. It is advisable to write down every process. While this may seem overwhelming, it will be extremely helpful when training a new team member. Review your processes often. The world is ever-changing and so is your business.
2. Know Your Numbers, Know Your Business. What does it cost to open your doors? Is your payroll within normal limits for your industry? These questions may seem like no-brainers, however, many of the businesses that have failed did so because someone else had a better handle on their numbers than the owner.
Which numbers are important? The obvious answer is income and expenses. Looking a bit deeper, make sure you understand what is coming in and going out at all times. If anything seems suspicious, ask questions and make sure you are comfortable with the answers.
3. Practice the Art of Marketing. The purpose of marketing is to let people know your doors are open. You have something they need that could make life easier, faster, or better. It’s not enough to just open your doors and expect the masses to come flooding inside.
What is marketing? To put it simply, it is everything you do. Marketing falls into two categories: internal and external.
The marketing of your business is much more than magazine ads, website design, or asking for referrals. Internal Marketing includes customer service and office décor. Many clients or customers love the business owner but can’t stand dealing with staff, or vice versa.
The look of the facility, from the moment customers get out of their cars, is also marketing. You want to put your best foot forward from the very first contact with clients and even for potential clients who may be driving by. What does your front door look like? Is there anything unsightly enough to turn someone away? Seeing a peeling sign or overgrown shrubbery could cause a potential customer to drive on, or worse, to visit a competitor whose facility has a fresh, clean appearance.
Once inside, is there trash to step over, or a strange odor in the office? Conduct a walk through from the front door to the point when a customer’s business is typically concluded, viewing everything from the customer’s point of view.
External Marketing is how you tell people about your business throughout the community. Ads, websites, billboards, Facebook and community events are all forms of external marketing. Customer attraction and retention must be a constant focus to keep your business healthy. Be aware of which actions are attracting your new customers, and determine the return on investment for everything you do. In addition, have a method in place for customers to let you know if their experience did not meet their expectations. Consider a post-visit survey, suggestion box, or even a follow-up phone call.
4. Communicate. We all know how to talk, but do we all know how to communicate? Effective communication is much more than merely transferring information and is not always easy, depending on the circumstances. There are two ways to communicate: verbal and written. Each is important and has its place in any business.
Written communication includes not only formal contracts or return policies with customers, but also employment offers, performance reviews, and counseling memos with employees. These written processes have a strong value in their ability to thwart potential barriers to providing excellent customer service. Anything discussed outside of the normal business processes should be documented to protect the business owner and the employee or customer.
Verbal communication with employees can be directives that take place at team meetings. Through these meetings, staff members understand the vision of the business and what the owner expects of their participation. Team meetings are a fabulous way to review processes and ensure that everyone is completing tasks the same way. Updates determined as a team should be added to the written processes. This keeps everyone on the same page.
Owning a business is many people’s dream. It is an achievable goal if you know where your business stands and ensure your team members implement your vision with their actions.