The nuts and bolts of starting a small business can seem overwhelming. You have to manage multiple tasks, from legal and intellectual property protection to sales and marketing. More often than not, the execution of these tasks shapes whether your business will take off or not.
You’d like your business to take off and gain the means to grow revenue quickly. For that to happen, you have to get the hang of the basics of running a small business early on. Here are some of the fundamentals you should know about.
1. Make a Business Plan
As Benjamin Franklin stated, “If you fail to plan, you are planning to fail.” Put in a business context, if you don’t have a plan, success will remain elusive. Statistics have shown that entrepreneurs who enter the fray with a formal plan are 16% more likely to succeed.
To give your business a high chance for viability, you have to create a solid business plan. The plan outlines your short and long-term goals, what you need to do to get there, steps along the way, and even helps anticipate unforeseen problems. It should answer questions such as:
- Why did we establish the business?
- Who is our target audience?
- What are our short and long-term goals?
- What are the possible costs and inputs for our business? (Salaries, rent, supplies, software development, insurance, taxes, maintenance, etc)
It stipulates the strategies and timelines for each milestone (including mini-goals) and offers a benchmark upon which you can measure progress.
Your business plan is a document you will reference time and time again. S it’s important that you put a lot of effort and thought into it.
2. Build a Marketing Strategy
You can have a stunning product or service, but if your target audience doesn’t know about it, you’ll make no revenue. Your product or service won’t walk itself to the customer’s doorstep, not in the crowded marketplace with wall-to-wall noise.
To inform your target customers about your product, you have to market it. You have to continually attract, build, and educate the target market about it. That can only happen if you plan and execute a solid marketing strategy.
A marketing strategy should define your goals, such as product penetration, building brand awareness and identity, market development, and more. It should also be practical, measurable, and flexible enough to accommodate market changes along the way.
3. Craft a Proper Customer Acquisition Plan
Customer acquisition is critical to the success of your business. Remember: no customers equals no business. So, if you want to keep your business sailing along, you have to master customer acquisition. In other words, you have to find and persuade potential customers to buy from your brand in a repeatable and measurable way.
Keep in mind that acquiring new customers in the overcrowded market is easier said than done for various reasons. The greatest challenge is differentiating your business in a highly competitive niche, and the spiraling acquisition costs compound that problem.
An excellent way to minimize the risk is to focus more on retaining existing customers. That’s because convincing existing customers to buy from your brand has a success rate of between 60-70%, whereas selling to a new customer has a success rate of 5-20%.
4. Hire the Right Talent
During the inception stage, you may have to wear many hats to keep your business afloat. However, as you break even and expand, the need to hire employees will arise. Still, cutting operating costs should be a top priority to keep the business off the ground.
To that end, you have to hire the right talent without inflating your wage bill. There are two ways to do that:
- Consider remote hiring. In an era where 46% of companies plan to adopt remote work permanently, you cannot step a foot wrong hiring remote talent. Offering remote work gives you a recruiting edge because 97.6% of employees prefer a flexible work model. Besides giving you a large pool of talent, it saves costs such as office rental charges and furnishings.
- Utilize freelancers and contractors. Freelancers give you an opportunity to source talent beyond your local market. Even better, hiring freelancers saves you both long-term recruiting and up-front costs. You won’t be paying a full-time salary, meaning you’ll sidestep the cost of paying benefits or retirement savings contributions.
5. Invest in Small Business Insurance
The small business world is fraught with multiple unforeseen perils. Liability, property theft or damage, and natural disaster can occur when least expected. They can cause operations to grind to a halt or cause business closure in the worst-case scenario.
Small business insurance offers a hedge against such things that could leave your business limping or grounded – for example, if a hurricane sweeps across your area and destroys your warehouse and everything in it.
Insurance could provide compensation to replace packaging machines and inventory to bring operations back to life. Doing so protects your investments, helping ensure the business runs smoothly and stays on a course for success even after the rainy days.
Grasp the Basics of Running a Small Business
While many entrepreneurs start with exciting business ideas looking to take over the world, only a few hit that goal. Do you want to emulate the spectacular success stories of Uber, Bolt, Airbnb, and many others?
It’s simple: grasp the basics of running a small business. Your brand may not grow to be a multi-billion dollar company, but having a plan and executing it well puts you on an upward trajectory.