It’s hard to build a successful small business. Let’s get that out on the table right from the start.
The small business graveyard is littered with the dead bodies of the hundreds of millions that dared venture before you, originally filled with crazy hopes, dreams and aspirations. These googley eyes most likely blinded them from what they really needed to focus on to build a successful small business, or business of any size for that matter.
In my corporate life, most recently as a CEO in the finance world, I was exposed to the full gamut of ‘what to do to’, and almost more importantly ‘what not to do’, when running a successful (see profitable) company. Whether you’re in the tech industry, fashion industry or whether you’ve just opened your suburb’s best fish and chip shop (I’m originally from NZ) the same rules still apply.
1. Have a great product or service
This seems like an obvious starting point but you’d be surprised at how poorly most people gauge ‘great product or service’. It usually involves feedback at the pub or at a family BBQ, with well meaning friends and relatives quick to lend their support. What I’m referring to is product-market-fit. Does the market (not your friends and family) want your product and will they pay what you’re asking? If they do then great, spend the time and effort to ensure you have a well executed (it doesn’t have to be ‘perfect’) product or service.
2. Look after your customers
Without loyal, repeat customers, conducting business is like trying to fill a bathtub with no plug. It’s only a matter of time before the bath (see; your bank accounts) run dry. You must look after your customers. Whether a customer comes back to you over and over is driven by two variables. The first is how well your product or service fits their needs and how well it performs. The second is how they feel being a customer of yours. Do they feel loved? Do they feel valued? Do they enjoy the experience of being your customer? This second variable is one that’s overlooked by most small business owners, to their own demise.
3. Look after your staff
That’s it. Nothing more. It starts with your staff. Look after your employees and they’ll in turn look after your customers. Happy employees do better work.
4. Manage your cash
‘Profitable’ businesses go out of business every day. It’s not just about your profit margins (although that’s obviously important), it’s really about your cash flow and managing the cash balances in your accounts so you don’t run dry. If you’re running an established, profitable business with healthy levels of cash at bank then this isn’t as important, but if you’re trying to start and/or grow a small business it’s critical. I’ve seen lots of businesses with the healthiest of healthy margins, with lots of loyal customers go out of business because the accounts ran dry; don’t let that happen to you.